Waterfall chart showing rise of manufacturing costs in China

The waterfall chart below shows the indexed manufacturing cost to build goods in China and the US. The first column on the left shows the indexed cost to manufacture goods in China in 2004. The following segments highlights the elements that have increased from 2004 to 2014 (natural gas, electricity, and labor). The next full column shows the cost to manufacture goods in China in 2014. Finally, the last column shows the cost to manufacture goods in the US in 2014.

The difference arrows highlight the key takeaway: China’s manufacturing cost advantage has shrunk from 2004 to 2014. While goods were 13.5% cheaper to manufacture in China¬† in 2004, the were only 4.4% cheaper in 2014. This is largely due to the increase in labor costs in China.

In general, waterfall charts are good data visualization tool to show of different components of a measurement (e.g. cost to manufacture) change.

The data from this chart was taken from a recent BCG study.

Average manufacturing cost index

Waterfall chart showing the development of relative manufacturing costs between china and the US

 

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