Czech Republic seen in top 20 of most competitive global manufacturing locations

The Czech Republic should elbow its way into the top 20 countries in the world for manufacturing competitiveness by 2020 according to a survey by one of the world’s top consultancy and advisory companies. That’s pretty good news for a county for which manufacturing contributes to more wealth creation than any other European Union state.

Photo: archive of Czech GovernmentPhoto: archive of Czech Government The good news comes in the 2016 global manufacturing competitiveness index compiled by the international consultancy Deloitte.

Looking forward to 2020, the report sees the Czech Republic climbing the rankings and being the 20th most competitive manufacturing location in the world. It is currently placed 23rd after falling from 19th position in 2013. The jump in rankings in 2020 comes with a points score of 57.4 out of 100. The current points score is 55.3.

The main factors pushing scores up in the survey is the availability of local talent in the workforce, cost competitiveness, workforce productivity, and the supplier network. Further down come such factors as the regulatory environment, education provision, and physical infrastructure such as roads, storage space and international connections.

Chief Economist at Deloitte’s Czech branch, David Marek, says Czech manufacturing companies have been benefitting in recent years from low labour costs with the low crown contributing to that advantage:

“The most important factor for the short term development of competitiveness, in terms of price competitiveness, is the three years long trend of declining labour costs in the Czech Republic together with a stable nominal exchange rate. It means a declining real exchange rate of the Czech crown and that’s the single most important factor driving competitiveness.”

David Marek, photo: Šárka ŠevčíkováDavid Marek, photo: Šárka Ševčíková But in spite of the survey predictions, Marek sees some possible clouds on the horizon in the ability of bosses to tap into the talent on the local jobs market as Czech unemployment continues to shrink.

“The unemployment rate has declined and now it is very, very low. And it’s now sometimes quite difficult to find a qualified labour force in some regions and in some sectors of the economy. So talent could be a problem being faced by an increasing number of companies.”

Before Czechs get too excited about the Deloitte survey, it should be pointed out that neighbour Poland is already up there in the top 20 at number 15 and will slip down just one place to 16 by 2020.

The year 2020, according to Deloitte, sees the United States reclaiming the crown lost to China as the world’s most competitive manufacturing economy and having a 100 competitiveness points score. Most of the leading pack of top performers stay the same but the Netherlands is seen out of the leading 20 to make the way for the Czech Republic.

Each Sunday, participants will be able to vote in our new series Hit of the Century, covering 100 years of music in Czechoslovakia and the Czech Republic. (More)