Czech Republic ranked 4th worldwide for manufacturing in new 2020 index

According to the 2020 Global Manufacturing Risk Index by Cushman & Wakefield, the Czech Republic rates among the world's top manufacturing locations

Jason Pirodsky

Written by Jason Pirodsky
Published on 10.07.2020 12:38 (updated on 10.07.2020)

czechinvest

The Czech Republic has been ranked 4th worldwide in Cushman & Wakefield’s 2020 Global Manufacturing Risk Index, an annual survey that assesses the most suitable locations for manufacturing among 48 countries in Europe, the Americas, and Asia-Pacific.

The index might be used used, for example, by corporations looking to invest in large-scale manufacturing operations abroad and seeking the most secure and cost-efficient destinations.

This year’s ranking, released for summer 2020, holds special significance as it gives insight into how the world’s manufacturing sector will recover from the coronavirus pandemic, and the roles different countries might play in an evolving industry.

Worldwide, Cushman & Wakefield’s Manufacturing Risk Index ranks China, the United States, and India as the top destinations for manufacturing, respectively.

But the Czech Republic, a fraction of the size of those nations in terms of both population and landmass, might be a surprise for some coming in at #4 on the list. Ranked #5 last year, the Czech Republic has surpassed Canada in the 2020 list.

“The Czech Republic rose in our baseline ranking to 4th place. Strong foreign direct investment into Czech’s manufacturing sector has made it possible to develop a modern infrastructure network with strong links to Germany,” reads the 2020 Global Manufacturing Risk Index.

“More specifically, leading up to the pandemic, labor markets in Katowice (Southwest Poland), northern Czech Republic and Slovakia had been very tight with almost a zero unemployment rate, significant wage inflation, and high employee turnover.”

“The economic shock caused by lockdowns could potentially ease labor market conditions that, up until now have put pressure on many manufacturers to consider locations further east. In addition to a well-developed infrastructure, the CEE region is part of the EU and has one of the highest densities of blue-collar workers in Europe.”

Each country in the Global Manufacturing Risk Index is scored against 20 indices that make up the three primary categories in the Index: Conditions (Talent/Labor Force, Logistics and Access to Markets, Business Environment, and Sustainability/Corporate Responsibility), Risks (Natural Disaster Risk, Economic Risk, Corporate Risk, and Energy Risk), and Costs (Manufacturing Labor Costs, Electricity for Industrial/Heavy Use, Construction Building Costs, and Registering Property Costs).

While the Czech Republic was rated among the second tier in the Costs area, they ranked in the first in the Risks and Conditions categories to come in at fourth overall in the 2020 Global Manufacturing Risk Index behind some of the world’s foremost manufacturing powerhouses.

As corporations around the world recover and re-strategize following the coronavirus pandemic, the heart of Europe could become a key player in the global manufacturing industry.