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China named 'World’s most attractive location for manufacturing'

China named 'World’s most attractive location for manufacturing'

China has reclaimed top spot in real estate services firm Cushman & Wakefield’s global ranking of the most attractive markets for manufacturing, confirming its status as the sector’s powerhouse. Last year’s number one ranked country, Malaysia, falls to third place behind Lithuania.

Cushman & Wakefield’s Manufacturing Risk Index report ranks countries based on a range of risk and cost factors, including political and economic risk, market conditions and labour costs, to provide a comprehensive assessment of the attractiveness of 42 countries worldwide.

China was ranked first in the baseline index due to its efficient supply chains and infrastructure networks that continue to provide a reliable export platform, despite cost-sensitive production increasingly moving to lower cost countries in the Asia Pacific region. Malaysia fell to third position as it shifts from being a low-cost location to a high-value manufacturing hub, but the country remains extremely attractive and has largest pool of skilled workers in the region.

Lithuania is ranked as the world’s second-most attractive destination for manufacturers, a result of having the lowest European labour costs in the CEE (Central & Eastern Europe) region, standing at 14% below Poland and 30% below the Czech Republic. Another factor in its success is that it is considered the second-easiest country in which to do business within the CEE region.

The UK, placed 31st in the 2018 rankings, has benefitted from the devaluation of sterling since the Brexit vote which has boosted demand for UK goods abroad. The UK is ahead of The Netherlands (34th), Germany (38th) and France (39th) in the global table. However, depending on the outcome of Brexit negotiations, the UK’s attractiveness as a location to serve the rest of Europe could be at risk as a hard border with the rest of Europe would increase the cost of goods and disrupt pan-European supply chains. In terms of Advanced Production rankings, when only high-tech manufacturing is considered, the UK is ranked 3rd behind the USA (1st) and Singapore (2nd), with Western Europe dominating the rest of the top 10.

Robert Hall, Cushman & Wakefield’s Chair of Industrial & Logistics, EMEA, said: “Location and supply chains continue to be the key concerns for the manufacturing sector. Central and Eastern European countries remain highly attractive and globally competitive, as overall labour costs in the region are relatively low and infrastructure investment increases connectivity with the rest of Europe. With Brexit looming and border controls potentially tightening between EU member states, the emphasis remains not only on the free flow of goods, but also the free movement of workers to relieve critical labour shortages across Europe.”

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