Export surge could help U.S. add 5 million jobs by 2020: study

Fri Sep 21, 2012 6:37am EDT
 
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By Scott Malone

BOSTON (Reuters) - Rising U.S. factory productivity, spurred by falling natural gas prices, could help the nation boost exports of products such as locomotives and factory machinery and add as many as 5 million manufacturing and support jobs by the decade's end, a new analysis found.

High worker productivity and low energy prices driven by a surge in shale gas production will give the United States a cost advantage in exports against Western European rivals and Japan in the coming years, according to a Boston Consulting Group report set for release on Friday.

By 2015, those factors will make average manufacturing costs in the United States lower by 15 percent than in Germany and France, 8 percent than in the United Kingdom and 21 percent than in Japan, the study projects. Factories' costs in China will remain 7 percent cheaper than those in the United States, however.

The competitive gap in some ways reflects the open U.S. labor market, where companies can quickly add or cut workers to meet changes in demand, said Hal Sirkin, a senior partner at the BCG consultancy and author of the report.

"In Europe and Japan, it's relatively hard to lay people off, and because of that you have employees for a long period of time that you may not be able to use," Sirkin said. "In the United States, there's much more flexibility."

Besides the ease of adding or firing workers, lower wages and Americans' readiness to move for work will make U.S. factory labor costs 20 percent to 45 percent lower than prevailing costs in Western Europe and Japan by 2015, the study found.

BCG forecast that a glut of natural gas production in the United States would keep the nation's prices of the fuel 50 percent to 70 percent below those in Europe and Japan, as well as hold down electricity costs.

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U.S. President Barack Obama tours the Port of Tampa in Florida, April 13, 2012. During his visit to the Port of Tampa - a gateway for U.S. exports to Mexico, Brazil and Argentina - Obama made his his election-year case for closer economic engagement with Latin America. REUTERS/Kevin Lamarque