Shale Resources Boost US Manufacturing

choi

John Bussey, So Is the Glass Half Empty? Two Views of US Trajectory. Wall Street Journal, Aug 30, 2013.
http://online.wsj.com/article/SB ... 43252707210542.html

Excerpt in the window of print: BCG says a picking up in manufacturing begins in earnest about 2015.

Note:
(a)
(i) Is the glass half empty or half full?
http://en.wikipedia.org/wiki/Is_ ... pty_or_half_full%3F
(ii) Prof Niall Ferguson's pessimistic view (or "riff") on US economy: "He riffs on the decline of the US." Here in the WSJ report, "riff" is an intransitive verb.

riff (probably by shortening & alteration from refrain;First Known Use 1935)
(n): "a distinct variation : TAKE <a disturbing…riff on the Cinderella story — Daria Donnelly>"
(vi): "to perform, deliver, or make use of a riff"
http://www.merriam-webster.com/dictionary/riff
(iii) Niall
http://en.wikipedia.org/wiki/Niall
(iv) "Mr Ferguson is a worthy Jeremiah"

Jeremiah (n):
"1 : a major Hebrew prophet of the seventh and sixth centuries BC
2 : person who is pessimistic about the present and foresees a calamitous future"
http://www.merriam-webster.com/dictionary/jeremiah

(b) Niall Ferguson, The Great Degeneration; How institutions decay and economies die. Penguin, 2013.

(c) "We've got a leavening business read"
(i) This quotation refers to the optismistic BCG article. See (d).
(ii) leaven
"(n):
1b : a material (as baking powder) used to produce a gas that lightens dough or batter
2 : something that modifies or lightens
(vt): to mingle or permeate with some modifying, alleviating, or vivifying element; especially : LIGHTEN <a sermon leavened with humor>"
http://www.merriam-webster.com/dictionary/leaven

(d) Harold L. Sirkin, Michael Zinser, and Justin Rose, The US as One of the Developed World’s Lowest-Cost Manufacturers; Behind the American export surge. BCG Perspectives, Boston Consulting Group, Aug 20, 2013.
http://www.bcg.com/media/PressRe ... px?id=tcm:12-142319
(i) What catches my eyes about the WSJ report is its grahic showing that in terms of productivity-adjusted labor cost, China  ("74") will be just 5 point behind US ("79") in 2015 ("Chinese figures represent the Yangtze River Delta region").

I take the trouble to register with BCG and log in to read the FULL article. It turns out that labor cost of China was discussed in a previous BCG report, which was well publicized. So the BCG article at issue focuses on the impact of cheap domectic energy (from shale) on US manufacturing. See (d)(ii) below. (In fact, US chemical companies also use shale gas/oil as raw material.) There is no need for you to read full BCG article; reading the quotation is enough.
(ii) Section 3 (whose heading is, "The US as a Low-Cost Country") of the BCG article states:

"Because so many shipping containers from the US to China are returning empty, freight costs from the US to China are particularly cheap—just $850 per FEU. That compares with $700 per FEU from neighboring Japan. As a result, Japan’s proximity to China will not necessarily be enough to offset the US advantage in lower overall production costs for many products that are not time sensitive.

"Many may assume that most of the production displaced from these developed economies will shift to China rather than to the US. But for reasons we explained in an earlier report in this series (Made in America, Again: Why Manufacturing Will Return to the US, BCG Focus, August 2011), wages have been rising so rapidly in China that its cost advantage over the US by 2015 is projected to be only around 5 percent for many goods exported to North America. When logistics, shipping costs, and the many risks of operating extended global supply chains are factored in, it will be more economical to make many goods now imported from China in the US if they are consumed in the US.

(iii) For FEU, see twenty-foot equivalent unit
http://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit
(section 1 Forty-foot equivalent unit: often [abbreviated as] FEU or feu)