- Some analysts say oil prices will go towards $250-$300 per barrel.
- Economies as China, India, ... are growing very fast resulting in higher salaries for their workers. As an example Adidas moved some of their production away from China, into new developping countries (such as Cambodja and Vietnam ...)
- Raw material costs (such as steel, ...) are becoming more and more global, i.e. 1 price for the same material, independent of the destination. Only transport costs can make a difference.
As a result of the above, I see following tendencies:
- The gap between 'the west' and the developping countries in costs is rapidly decreasing.
- The cost of transport is high, both in cost (oil prices) and environmental consideration (carbon footprint).
Therefore, it will become more and more interesting to produce close by the end-consumer. As such, Asia will of course stay a big market with therefore a lot of production needed (especially as the buying power in Asia is rising). The other alternative will be to produce close to the place of the raw materials, but there again transport cost will play a significant role since transporting raw materials from different places to the end consumer is cheaper and easier, taking into account that there are no places where all raw materials are together.
Thus, globalisation will be slowing down and regional production will remain. Of course, companies will be looking for the cheapest and most efficient place to produce (i.e. close to rwa materials or easy to reach with raw materials and close to end consumers).
