Dang! Bridgewater almost sounds optimistic!
Bridgewater Daily Observations - "Is a US Manufacturing Renaissance Beginning?"
Is a US Manufacturing Renaissance Beginning?
US competitiveness is stronger than it has been in years. For a while now, there have been anecdotal suggestions that global manufacturers might be relocating to the US to take advantage of the lowest relative US wages in over a decade and the cheap energy costs created by the recent US energy boom. We are starting to see evidence that improving US competitiveness is flowing through. The US has begun to reverse a decade of losses in global export markets and is now gaining global market share faster than any country other than China. It has been gaining share in industries like autos, machinery, and electronics for the first time in decades, and these competitiveness gains have been a moderate support to growth. Additionally, there are signs that investment is ramping up in manufacturing industries most sensitive to energy costs. Chemical manufacturing, where production costs are dominated by energy, is seeing the strongest new investment and employment growth in decades. There are also hints of increasing investment in industries where there is an advantage created by proximity to chemical production or from cheap electricity. All of these impacts, taken together, are now adding up to something like 0.50% to US growth and will be a positive support to the US balance of payments.
So here are their pertinent points
U.S. relative wages are the lowest they have been in over a decade
U.S. manufacturing unit labor costs have decreased relative to our piers
Natural Gas prices and electricity prices in the U.S. have decreased relative to our piers