China manufacturing activity is still on the rise, albeit slowly. The manufacturing sector is seeing incremental increases, and the PMI (purchasing manager’s index) has moved into the positive column as Chinese manufacturers report a rise in new orders and output. Below are some of the biggest offshore manufacturing trends we’ve seen this year that seem to also forecast the future of China manufacturing.
1. Factory Growth, Expansion, & Improvements
Operating conditions in Chinese factories have significantly improved over the past year. A PMI above 50 suggests an expansion and increased manufacturing activity during the middle of the year. This came from a slight increase in work orders over the previous three months. New factory openings in China’s inner provinces could also be one of the factors affecting this trend. These developing facilities are starting to show promise of future growth potential, which also translates to greater opportunities for US companies to have more specific or custom products made in China. Further indicating that outsourced manufacturing in China is rising and expected to continue in the foreseeable future.
2. Adapting to Globalization
The face of manufacturing has certainly experienced its greatest changes over the past 100 years, and is showing no sign of stopping. Many of these changes are based on how the world develops, manufactures, and consumes goods and services. Globalized manufacturing has affected the economies of countries around the world. And despite a feeling of “It’s going to get a little worse before it gets better”, current globalization and manufacturing trends are the catalysts to new ways of thinking and innovation in product materials, while still boosting national economies so that companies, consumers, and laborers win across the board.
3. Continued Rise in Factory Automation
The China manufacturing industry is not without its fair share of high-tech and intelligent factories. Many factories, depending upon the types of highly technological products and devices being mass-produced, have transitioned into utilizing robotics, computer automation, and virtual testing and simulation in their manufacturing processes. Many of these factories still require engineers and workers to manage the automation and ensure quality. With this increase in smart manufacturing and automation, total cost of labor continues to decrease while quality increases.
4. Accessibility for the “Little Guys”
Based on future output expectations and current inventory trends, manufacturing activity is rebounding in China. As such, the world of manufacturing as opened up to small businesses and start-up companies. ITI Manufacturing is a US-based turn-key, China manufacturing liaison company designed to help US-based companies experience successful outsourcing to Chinese manufacturers. With continued growth and opportunity in China, new companies and small businesses that traditionally could not access manufacturers in Asia, are now able to successfully have their products made in China as well.
5. Chinese Consumers
Consumer spending is an integral part of China’s economy. While the country remains one of the world’s biggest manufacturers of consumer goods for export, many of those goods are also being consumed in China. Consumption was responsible for almost 65% of China’s 2016 GDP growth, and the trend is likely to continue. What this means for US companies manufacturing in China is that growth is inevitable. Not only will they continue to profit from offering great products in the US, if those same products sold in China it could bring about astronomical profit.
Companies like ITI Manufacturing continue to be at the forefront of the outsourced China manufacturing sector. We’ve been successfully navigating and taking US companies through the offshore manufacturing process for nearly 45 years. We can help your company do the same. For details and information, contact one of our experts toll-free at 888-574-6823.