Study compares costs of world-wide manufacturing locations

KPMG has released the results of its 2008 Competitive Alternatives study—an independent analysis of major cost factors affecting manufacturing site selection around the world – including Australia.

KPMG has released the results of its 2008 Competitive Alternatives study—an independent analysis of major cost factors affecting manufacturing site selection around the world — including Australia.

The 6-month research program for the study, the 7th in a series dating back to 1994, covered more than 100 cities in Australia, Canada, France, Germany, Italy, Japan, Mexico, Netherlands, the UK, and the US. This edition measured 27 significant cost components, including labour, taxes, real estate, and utilities.

Even more interesting, these cost components are cross-referenced with 17 different vertical industries over a 10-year planning horizon. Eleven of those industries are in manufacturing, and most qualify as advanced manufacturers.

This year marked the first time the study compared an emerging industrialised country—Mexico—with the control group of mature industrialized countries. Mexico clearly separated itself from the competition with a 20% overall cost advantage.

Australia on the other hand rated very favourably, our closest competitor was usually Canada or the US.

Australia, Canada and the US were the cost leaders among the nine established industrialised countries examined. Business costs in these three countries were virtually equivalent, with less than 1% separating the countries.

With figures broken down further, business costs expressed as an index (with US assigned the baseline index of 100) revealed Adelaide at 97.9; Melbourne 99.4, Brisbane 100.1; and Sydney 102.7.

The Competitive Alternatives study is available at no cost by visiting www.competitivealternatives.com.