Cushman & Wakefield evaluate established and emerging markets in light of recent geopolitical developments.

Between the rise of automation and the growing geopolitical uncertainty, the manufacturing sector appears to be undergoing a sea change. While the ultimate effects of two of the biggest surprises of 2016âBrexit and the election of President Donald Trumpâare still being evaluated, their significance is undeniable.
Cushman & Wakefield (C&W), a real-estate services firm, recently published its annual Manufacturing Risk Index, which assesses the political, economic, technological and environmental risks in site selection for new manufacturing facilities.
The report contains an Established Index, which ranks the 30 largest countries by manufacturing output, and a Pioneering Index, which measures the attractiveness of growing but less mature markets.
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Manufacturing Risk Index Rankings
The rankings are determined under what C&W describe as âthe scenario of a highly automated manufacturer,â i.e., one that requires unskilled labor and operates in a multi-regional market.
Under this scenario:
- Conditions, including labor force, logistics, and business environment are weighted at 40 percent
- Risks, including natural disasters, economics and energy, are weighted at 20 percent
- Costs, including labor, construction and electricity, are also weighted at 20 percent
The report also includes rankings based on alternative scenarios, such as manufacturers driven by low operating costs, which weighs conditions and risks at 20 percent and costs at 60 percent.
According to C&W, data for the report is drawn from â36 reliable secondary sources and data indicators.â
Malaysia remains in the top spot of the Established Index, followed by Taiwan, China, the US, South Korea, Canada, Hungary, Sweden, the Czech Republic and the Netherlands in the top ten.
Of these, the top six have all retained their ranking from the previous year.
On the Pioneering Index, Costa Rica is ranked first (up from fourth in 2015), followed by Vietnam, Sri Lanka, Lithuania and Tunisia in the top five.
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Manufacturing and Industry 4.0
Looking at the market as a whole, the report asserts that in the short term, manufacturing remains partly constrained by a lack of capital investment in plants, reducing near-term radical shifts in location decisions. However, in the medium term, the report expects the emerging technologies of Industry 4.0 to result in different criteria becoming more important in future decision making.
âWhile macro events such as Brexit and the US Presidential election result carry risks in terms of regulation and market access, disruptive technologies such as additive manufacturing and robotic process automation also continue to transform the manufacturing world by reshaping the production cycle in the longer term,â said Neil McLocklin, partner, strategic consulting at C&W.
 âEven before the 2016 US Presidential election, we saw shifts in manufacturer and supplier location strategies, as US customers demand faster turnaround times and product customization or value-add options that are often best suited for domestic or North American-based production,â said John Morris, head of logistics and industrial for the Americas at C&W.
For more information or to download the complete report, visit the Cushman & Wakefield website.