Those looking for some more optimism regarding the long term prospects of the U.S. economy will want to check out the Barron’s article that I’ve attached below.
Here are some key highlights from the article:
- As the only industrialized superpower not decimated by World War II, the United States once made nearly 40% of the planet’s goods. These days, that number has shrunk to 18%.
- After decades of outsourcing, however, the U.S. is quietly enjoying a manufacturing revival, and companies like Apple, Caterpillar, Ford, GE and Whirlpool are making more of their goods on American soil again.
- The Rust Belt owes its new shine to many factors, including rising wages and industrial-land costs in Asia. But none is bigger than the U.S. energy boom. Thanks to a head start in extracting oil and gas from shales, North America now produces far more natural gas than any other continent. Unlike oil, gas isn’t easily transported across oceans, and a result is some of the world’s cheapest energy within our reach: Natural gas here costs $3.55 per million British thermal units, versus roughly $12 in Europe and $16 in Japan.
- Cheap gas isn’t the only booster in our tank. In the decade since China joined the World Trade Organization in 2001, that nation has become Earth’s low-cost factory. But wages and benefits there are rising 15% to 20% a year, while they’re stagnant here. Despite Beijing’s efforts to hold it down, the yuan has gained 33% against the dollar since 2005. Industrial land averages $10.22 a square foot across China, but rises to $11.15 in the coastal city of Ningbo and $21 in Shenzhen — compared with $1.30 to $4.65 in Tennessee and North Carolina.
You can check out the full article here: The Next Boom, Barrons 1.28.2013