If shoppers are noticing more “Made in America” labels these days, they may have hydraulic fracturing (commonly called “fracking”) to thank.
Despite a raft of bad news for American manufacturing in recent decades, and a persistent migration of jobs from our shores to Asia and Latin America, a new report from the Boston Consulting Group shows that the costs of making things here at home is a negligible 5 percent higher than China. The costs are actually 10 to 20 percent lower than major European exporters.
The BCG report, detailed in a Fortune article, shows that the news gets even better: China’s manufacturing costs are expected to surpass those in the U.S. over the next several years, as wages there rise and productivity here increases.
While global trade and production is a complex organism, the report speculates that cheap energy from fracking may be the single biggest factor driving down manufacturing costs. American companies pay up to 50 percent less for power than their competitors, BCG said.
Here in New Mexico, companies have been fracking in one form or another for some 60 years. Most fracking happens in the San Juan Basin, in the northwest part of the state, and the Permian Basin, located in the southeast part of the state. The industry supports 105,000 jobs and provides $11.2 billion to New Mexico’s gross state product.