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Area Development

Update on Structural Cost Pressures Facing U.S. Manufacturers

11-1-2008
Five years ago, The Manufacturing Institute and the Manufacturers Alliance/MAPI issued the first structural cost study, followed by an update in 2006. The fundamental rationale for closely monitoring this index remains valid: costs such as taxes, energy, and regulatory compliance are much higher in the United States than in other major industrial countries, putting U.S. manufacturers at a disadvantage. These external costs are out of the control of manufacturers and are mainly influenced by government action and/or inaction.

This report updates the two previous studies with the most current data. It diverges from its predecessors because progress is being made on the agenda to reform structural costs. The disadvantage that U.S. manufacturers face is17.6 percent when compared with nine major industrial countries including Germany, Japan, Canada, Mexico, and China.  This is still a substantial hurdle that cuts into the competitiveness of American businesses that operate in a global market. But it is an improvement from the 31.7 percent gap that we reported on in 2006.

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