Global shifts in manufacturing, consumption trends, and international competition are three factors that will shape the future of goods movement and the demand for warehouse and distribution space, according to a report issued by The NAIOP Research Foundation.
MANUFACTURING. The report says global shifts in manufacturing have occurred as supply chain tracking systems and logistics networks better support remote production sites that offer lower labor costs. Challenges – including delivery of parts for production and delivery of finished products – make predictability more difficult in the supply chain. Many value-added jobs have moved from the United States to other countries, helping these countries move toward their own economic stability.
CONSUMPTION. India and China will account for an estimated 25-40% of the total world demand for goods and services by 2025. These consumers will have a dramatic impact on the site selection process for the manufacturing facilities and distribution centers. In 2011, China is expected to out-produce the United States for the first time.
GLOBAL COMPETITION. International markets are improving their attractiveness to business and competing with the United States for multi-national marketing, investment, research and development, and manufacturing. Increasing pressure from new entries into the roster of countries that are attractive to multi-nationals include the BRIC (Brazil, Russia, India and China) countries as the top locations for foreign direct investment in 2009-2011. The report said government policies have an impact on manufacturing in the United States; key to retaining competitiveness and attractiveness is to re-frame business policies with a focus on corporate taxes, research and development taxes, and consistent application of policy regulations. These will help ensure that U.S.-based companies are not hindered and that investment is seen as less risky in the U.S. than elsewhere.
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