The country with the lowest manufacturing costs, we found, is not China. It's Indonesia, then India, Mexico, and Thailand. China comes next—with Taiwan's costs just a tad higher and the U.S.'s a bit more than that, ranking America No. 7 in our study.
As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it's almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, that's hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation.