Global Manufacturing Risk Index

By : Neha Dhyani

Updated : May 11, 2022, 6:17

Cushman & Wakefield, a US-based property consultant's 2021 Global Manufacturing Risk Index, assesses the most beneficial locations for global manufacturing among 47 countries in the Americas, Europe, and the Asia Pacific.

In the report published by Cushman & Wakefield, countries' Global Manufacturing Risk Index is assessed based on four key parameters:

  • Bounce Back: The Bounce Back rating measures a country's ability to restart its manufacturing sector. Those with infrastructure support and economic conditions for a faster recovery are at the top of the ranking, while those with more obstacles to achieving a full recovery are at the bottom.
  • Conditions: Business environment, including the availability of labour/talent and market entrance.
  • Costs: Operating costs, including real estate, labour, and electricity.
  • Risks: Economic, Political, and environmental.

What is the Global Manufacturing Risk Index?

The Global Manufacturing Risk Index ranking development indicates the growing interest shown by manufacturers in India as an ideal manufacturing hub over other countries, including the US and those in the APAC region.

A business confidence survey in June 2021 under the Global Manufacturing Risk Index conducted by the European chamber of commerce showed that one in six respondents are considering expanding their current china operations in 2021, an eight percentage-point increase year over year. About 65% of members still rank China among their top three destinations for new investment.

South Korea unveiled plans to invest $451 billion into semiconductor research and production through 2030. Samsung Electronics and SK HYNIX Inc will lead the program with central, state, and local government support. The investment will be focused on the newly named "K-semiconductor belt" located to the south of Seoul.

In recent years, Vietnam has become an increasing focus for manufacturers due to its regional centrality, sublime market integration, and favourable production costs—with Samsung, Apple, Nintendo, LG, Panasonic, and Intel all located in the country.

Global Manufacturing Risk Index - Factors Impacting Global Manufacturing

Disruptions in the supply chain, labour costs, and availability are the key factors in deciding manufacturing location. But production line breakdowns caused by COVID-19 lockdowns and an imposed decline in the onsite workforce have caused great damage in factories across the globe, hampering the manufacturing sector and the Global Manufacturing Risk Index.

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Factors Contributing to Improvement in India's Global Manufacturing Risk Index Ranking:

The increasing focus on India can be recognized by India's operating conditions and cost competitiveness.

India having a huge population, provides a younger workforce with innovative capabilities that has the potential to stimulate the country's manufacturing sector.

The development in ranking can also be attributed to the relocation of plants from China to other parts of Asia because of an already established base in the engineering, pharma, and chemicals sectors.

Also, these factors are considered to be at the centre of the US-China trade tensions. However, reforms to labour and land laws are critical to India's success as a global manufacturing hub.

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Global Manufacturing Risk Index - Recent Initiatives

  • Make in India national Infrastructure Pipeline (NIP)
  • Skill India
  • Credit Guarantee Scheme for Micro and Small Enterprises
  • A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
  • Prime Minister's Employment Generation Program (PMEGP)
  • Industrial corridors
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FAQ on Global Manufacturing Risk Index

Q.1. What is the Global Manufacturing Risk Index?

Ans. Global Manufacturing Risk Index assesses the most beneficial locations for global manufacturing among 47 countries in the Americas, Europe, and the Asia Pacific.

Q.2. Which country has the highest Global Manufacturing Risk Index rank?

Ans. China has topped the Global Manufacturing Risk Index.

Q.3. What is India's rank in the Global Manufacturing Risk Index 2021?

Ans. India ranked 2nd in the 2021 Global Manufacturing Risk Index and has overtaken the United States as the global manufacturing destination.

Q.4. What is India's rank in the 2020 Global Manufacturing Risk Index?

Ans. India ranked 3rd in the 2020 Global Manufacturing Risk Index.

Q.5. What do you mean by global manufacturing in the Global Manufacturing Risk Index?

Ans. A global manufacturing or production network in the Global Manufacturing Risk Index refers to the interconnected functions, operations, and transactions needed to bring a product from prototyping to final delivery.