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Manufacturers are prospering, but still need help

There is a robotic arm working to manufacture part of the shell of an automobile.
05 Aug 2013

Manufacturing businesses in the United States have a bright outlook. The Institute for Management recently revealed its index of factory activity rose from 50.9 in June to 55.4 in July - any reading above 50 indicates growth. Furthermore, research firm McKinsey Global Institute suggests that combining knowledge-intensive manufacturing could jumpstart GDP and close the trade deficit in the U.S.

"It looks like we're starting the third quarter off on a fairly solid note," Sam Bullard, senior economist at Wells Fargo Securities, told Bloomberg. "Manufacturing is holding in relatively well."

However, U.S. manufacturing firms need help. The McKinsey Global Institute study stated government tax and regulation policies, and a lack of growth in infrastructure and workforce development are making it difficult to run these companies. This is where seeking solace in offshore shelter companies in Mexico could play a role and provide the cost savings that can greatly benefit manufacturing firms.

Take advantage of economies of scale
Indirect, overhead and administrative costs can often strain manufacturing businesses and hold them back from sustaining growth. But with demand growing throughout the U.S., especially in automotive and appliance industries, companies need a place to expand without overextending their budgets. Shelter companies in Mexico have been proven to provide better cost savings for outsourcing, when compared against China and India. In addition, the economies of scale benefits that are created when teaming up with these firms south of the border are plenty. Cost reduction is possible through settling in an industrial park with the help of a shelter company in Mexico. Savings can occur in such areas as building maintenance and security, worker transportation, import and export, labor recruiting and more.

Manufacturing firms aren't expected to slow down
With the manufacturing industry accounting for about 12 percent of the U.S. economy, these businesses are going to have to sustain, or even exceed, the levels of output they achieved in the second quarter. It may be slightly easier for manufacturers to expand, as Bloomberg reports, headwinds associated with the federal budget and higher income taxes will go away, but it still makes sense for them to partner with shelter companies in Mexico to give them an opportunity to save on production while also keeping up their output.

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