(I'm no economist, so I thought I'd throw this thought out for the learned heads of hatrack to gnaw on.)
As fuel costs increase, so should shipping costs. Does this mean that it will become cheaper to manufacture products locally than it is to import them from overseas manufacturing? Or is the increase in fuel cost so much smaller than the savings in labor cost that this won't really have an effect? I really have no idea of the comparitive costs involved here, but find myself curious about the situation.
--Enigmatic
Posted by Juxtapose (Member # 8837) on :
I'm just going based on intuition here, but I imagine the answer would vary widely depending on the product, the company, the locations of both the client and the manufacturer etc, etc.
Posted by Lyrhawn (Member # 7039) on :
It's certainly a factor. As it becomes more expensive to ship stuff, you'll see more and more manufacturing being moved to Mexico, and other nearby South American countries where labor is just as cheap, and transportation costs are far less.
You'll especially see this being the case with the start of CAFTA, and have already seen it since NAFTA was first forged (assuming Mexico doesn't nix it after their next election).