Economic Updates¶
- Summary of Changes
- Exchange Rates
- Labor Rates
- Total Manufacturing Rates
- Updated Machine Names
- Material Rates
Summary of Changes¶
Labor rate fluctuations between the 2024-09 RDLs and the 2024-06 RDLs are mainly due to currency volatility in many regions. Because aPriori represents base data in USD, currency exchange rate fluctuations will cause labor rates expressed in USD to change, even when they are unchanged when expressed in a region’s native currency. Significant corrections to actual labor rates were made to one region (Saudi Arabia) as described below.
For Saudi Arabia, average labor rate increased by 833%. This significant adjustment is due to a joint review of the region carried out by aPriori and our data partners. Previous data was noted to be low, based on recent trends in the country. The data sources for Saudi Arabia now are updated and labor rates are aligned with market expectation.
Japan labor rates increased by an average of 9.5%. The yen also rose in value by 9.0% which results in this labor rate increase. Key factors contributing to the yen's rally:
- Momentum trading: Trend-following investors who had been short selling the yen are now buying it back to avoid further losses, driving the price up.
- Shift in market sentiment: The yen's recent strength has led to a change in market sentiment, with more investors now bullish on the currency.
- Bank of Japan's policy shift: The Bank of Japan has recently raised interest rates and abandoned a policy of capping yields, making the yen more attractive to investors.
- While there are fundamental reasons for the yen to remain weak, such as the interest rate differential with the U.S., the current rally is primarily driven by technical factors and investor behavior . Many investors are concerned about the potential for further losses if the yen's rally continues and are taking steps to reduce their exposure to the currency.
Mexico’s average labor rate decreased by 12.4%. This aligns with the trend of the peso in the markets, currently trading 13.2% down from the 2024-06 RDL release. Key factors contributing to the peso's decline:
- Mexican elections: The election of Claudia Sheinbaum's party has negatively impacted the peso.
- Carry trade winding down: The decline in carry trade activity has weakened the peso.
- US economic deceleration: Fears of a US recession and the Bank of Japan's monetary policy normalization have contributed to the peso's weakness.
Brazil’s average labor rate decreased by 5.4%. This aligns with the market trend for the Brazilian real, currently trading down 5.8% from the previous RDL release. Key factors contributing to the real's decline:
- The Brazilian real initially weakened due to concerns about the country's fiscal deficit, which tripled analyst expectations in July.
- The central bank intervened twice to support the real. These interventions helped curb the real's losses, but underlying issues remain.
- Deteriorating fiscal outlook with high spending and limited deficit reduction plans.
- Uncertainty about future interest rate hikes, despite a potential 50 basis point increase in September.
Turkey's average labor rate is down 11%, primarily due to currency volatility, with the lira dropping by 5.4%. Key factors contributing to the lira's decline:
- The lira continues to fall against the dollar in line with the historical trend dating back to 2018, albeit at a reduced rate.
- This is largely due to a combination of long-term factors, including:
- Economic mismanagement: The government's unorthodox economic policies, such as lowering interest rates to promote growth, have led to high inflation and a weakening lira.
- Political instability: Turkey has experienced a series of political crises in recent years, which have also contributed to the lira's decline.
Malaysia’s average labor rate is trending up by 15% since the last RDL release, mainly due to the strong behavior of the ringgit, which has increased by 8.1%. Key factors contributing to the ringgit's rally:
- The Malaysian ringgit (MYR) has appreciated against the U.S. dollar (USD) due to a combination of factors, including:
- Strong domestic economy: Malaysia's GDP has been expanding at a healthy rate, attracting foreign investment and driving demand for the ringgit.
- Positive current account balance: Malaysia has a positive current account balance, indicating that it is attracting more capital inflows than it is sending out.
- Tight monetary policy: The Bank Negara Malaysia (BNM) has adopted a cautious monetary policy, keeping interest rates steady and intervening in the forex market to support the ringgit.
- Favorable global factors: The U.S. dollar has been weakening due to expectations of interest rate cuts by the Federal Reserve, which has supported emerging market currencies like the ringgit.
All the noted labor rate changes also have a follow-on impact to total manufacturing rates of each highlighted region.
Exchange Rates¶
This table shows the changes and percentage changes in currency exchange rates relative to the 2024-06 Regional Data Libraries release.
| Currency Name | Currency Symbol | Currency Exchange Rate (vs. USD) | Percent Change from 2024-03 |
|---|---|---|---|
| Australian Dollar | AUD | 0.67735 | 1.9% |
| Brazilian Real | BRL | 0.18225 | -5.8% |
| Canadian Dollar | CAD | 0.74022 | 1.1% |
| Chilean Peso | CLP | 0.00110 | -0.6% |
| Chinese Yuan Renminbi | CNY | 0.14050 | 1.8% |
| Czech Koruna | CZK | 0.04465 | 1.7% |
| Danish Krone | DKK | 0.14977 | 2.9% |
| Euro | EUR | 1.11743 | 2.9% |
| Hungarian Forint | HUF | 0.00283 | 0.2% |
| Indian Rupee | INR | 0.01192 | -0.9% |
| Indonesian Rupiah | IDR | 0.00007 | 4.8% |
| Japanese Yen | JPY | 0.00695 | 9.0% |
| Korean Won | KRW | 0.00076 | 2.9% |
| Malaysian Ringgit | MYR | 0.23002 | 8.1% |
| Mexican Peso | MXN | 0.05208 | -13.2% |
| Norwegian Krone | NOK | 0.09472 | -0.4% |
| Philippine Peso | PHP | 0.01784 | 3.7% |
| Polish Zloty | PLN | 0.26103 | 2.3% |
| Pound Sterling | GBP | 1.31893 | 3.4% |
| Romanian Leu | RON | 0.22460 | 2.9% |
| Russian Ruble | RUB | 0.01088 | -3.6% |
| Shekel (Israel) | ILS | 0.27297 | 0.3% |
| Singapore Dollar | SGD | 0.76765 | 3.6% |
| South African Rand | ZAR | 0.05637 | 3.8% |
| Swedish Krona | SEK | 0.09785 | 4.1% |
| Swiss Franc | CHF | 1.18112 | 8.0% |
| Taiwan Dollar | TWD | 0.03142 | 1.1% |
| Thai Baht | THB | 0.02943 | 7.8% |
| Turkish Lira | TRY | 0.02940 | -5.4% |
| United States Dollar | USD | 1.00000 | 0.0% |
| Vietnamese Dong | VND | 0.00004 | 2.6% |
Labor Rates¶
This table shows labor rate changes relative to the 2024-06 Regional Data Libraries release.
Note:
The labor rate column shows the average labor rate per country across all skill levels.
| Region | Current Avg Labor Rate | Percent Change from 2024-03 |
|---|---|---|
| Australia | $31.42 | 2.7% |
| Austria | $31.23 | 10.2% |
| Belgium | $45.85 | 15.0% |
| Brazil | $3.60 | -5.4% |
| Canada | $24.30 | 4.2% |
| Canada-Alberta | $27.76 | 4.2% |
| Canada-Atlantic (PE-NB-NL-NS) | $21.01 | 3.9% |
| Canada-Ontario | $24.18 | 4.2% |
| Canada-Quebec | $22.21 | 4.1% |
| Canada-West (BC-MB-SK) | $23.17 | 4.1% |
| Chile | $6.18 | -5.1% |
| China | $13.09 | 6.2% |
| China-Central-Hubei-Wuhan | $10.97 | 6.2% |
| China-East-Jiangsu-Suzhou | $13.44 | 6.2% |
| China-East-Shandong-Qingdao | $11.34 | 6.2% |
| China-East-Shanghai | $16.87 | 6.2% |
| China-East-Zhejiang-Hangzhou | $13.92 | 6.2% |
| China-North-Beijing | $23.39 | 6.2% |
| China-North-Hebei-Tianjin | $10.23 | 6.2% |
| China-Northeast-Liaoning-Dalian | $10.08 | 6.2% |
| China-SouthCentral-Guangdong-Guangzhou | $13.49 | 6.2% |
| China-Southwest-Chongqing | $10.45 | 6.2% |
| China-Southwest-Sichuan-Chengdu | $11.48 | 6.2% |
| Czech Republic | $15.84 | 6.8% |
| Denmark | $47.28 | 8.4% |
| Eastern Europe | $14.95 | 10.8% |
| Finland | $31.40 | 3.4% |
| France | $40.15 | 19.5% |
| Germany | $34.67 | 6.3% |
| Hungary | $13.49 | 11.0% |
| India | $2.22 | 8.7% |
| India-Delhi | $2.45 | 8.7% |
| India-Karnataka | $2.85 | 8.7% |
| India-Maharashtra | $2.70 | 8.7% |
| India-West Bengal | $2.59 | 8.7% |
| Indonesia | $1.26 | 5.3% |
| Ireland | $34.26 | 6.8% |
| Israel | $19.03 | 2.6% |
| Italy | $24.17 | 7.8% |
| Japan | $14.21 | 9.5% |
| Malaysia | $4.93 | 15.9% |
| Mexico | $6.27 | -12.4% |
| Mexico-Mexico City | $8.51 | -11.4% |
| Mexico-North | $6.80 | -13.9% |
| Mexico-South-West | $4.97 | -12.4% |
| Netherlands | $35.71 | 11.3% |
| Norway | $42.04 | 4.4% |
| Philippines | $1.94 | 7.2% |
| Poland | $16.93 | 17.6% |
| Portugal | $13.23 | 12.3% |
| Romania | $12.98 | 14.8% |
| Russia | $5.13 | -3.1% |
| Russia-Altaiski Krai | $3.20 | -3.1% |
| Russia-City of Moscow | $9.33 | -3.1% |
| Russia-Kaluga | $4.68 | -3.1% |
| Russia-Leningrad | $5.40 | -3.1% |
| Russia-Moscow region | $6.46 | -3.1% |
| Russia-Republic of Dagestan | $2.81 | -3.1% |
| Russia-Saint Petersburg | $7.35 | -3.1% |
| Russia-Sverdlovsk | $5.41 | -3.1% |
| Russia-Tyumen | $12.79 | -3.1% |
| Russia-Udmurtia | $3.71 | -3.1% |
| Singapore | $31.59 | 9.3% |
| Slovakia | $13.53 | 7.8% |
| South Africa | $6.78 | 3.9% |
| South Korea | $21.61 | 10.5% |
| Spain | $20.14 | 12.0% |
| Sweden | $26.42 | 10.6% |
| Switzerland | $62.12 | 11.1% |
| Taiwan | $10.26 | 8.3% |
| Thailand | $2.28 | 8.4% |
| Turkey | $4.81 | 11.3% |
| USA | $38.13 | 0.5% |
| USA-California | $44.30 | 0.5% |
| USA-Central (AR-IA-KS-MT-NE-ND-OK-SD) | $30.24 | 0.5% |
| USA-Mid-Atlantic (DE-MD-PA-VA) | $39.88 | 0.5% |
| USA-Mountain (AZ-CO-ID-NV-NM-UT-WY) | $33.78 | 0.5% |
| USA-North Central (IL-MI-MN-OH-WI) | $36.51 | 0.5% |
| USA-Northeast (MA-NY-NJ-CT) | $47.35 | 0.5% |
| USA-Northeast-Rural (ME-NH-RI-VT) | $34.37 | 0.5% |
| USA-Pacific (WA-OR-HI-AK) | $36.12 | 0.5% |
| USA-Southeast (AL-FL-GA-IN-KY-LA-MO-MS-NC-SC-TN-WV) | $32.37 | 0.5% |
| USA-Texas | $38.37 | 0.5% |
| United Kingdom | $26.93 | 23.9% |
| Vietnam | $1.75 | 9.6% |
| Western Europe | $32.31 | 12.9% |
| Saudi Arabia | $12.03 | 833.7% |
Total Manufacturing Rates¶
This table shows changes in total manufacturing rates (labor + direct overhead + indirect overhead) relative to the 2024-06 Regional Data Libraries release. All columns with rates included are the AVERAGE rate for that specified country.
| Region | Current Avg Labor Rate | Direct Overhead Rate | Indirect Overhead Rate | Total Manufacturing Rate | Percent Change from 2024-03 |
|---|---|---|---|---|---|
| Australia | $31.42 | $48.08 | $15.54 | $95.03 | 1.0% |
| Austria | $31.23 | $52.14 | $15.41 | $98.78 | 8.0% |
| Belgium | $45.85 | $40.64 | $21.09 | $107.58 | 12.3% |
| Brazil | $3.60 | $39.29 | $2.92 | $45.80 | 0.3% |
| Canada | $24.30 | $38.50 | $12.25 | $75.05 | 1.6% |
| Canada-Alberta | $27.76 | $38.50 | $13.86 | $80.12 | 1.7% |
| Canada-Atlantic (PE-NB-NL-NS) | $21.01 | $38.50 | $10.73 | $70.24 | 1.3% |
| Canada-Ontario | $24.18 | $38.50 | $12.20 | $74.87 | 1.6% |
| Canada-Quebec | $22.21 | $38.50 | $11.30 | $72.00 | 1.4% |
| Canada-West (BC-MB-SK) | $23.17 | $38.50 | $11.74 | $73.40 | 1.5% |
| Chile | $6.18 | $37.72 | $4.17 | $48.08 | -2.2% |
| China | $13.09 | $30.92 | $6.89 | $50.90 | 0.2% |
| China-Central-Hubei-Wuhan | $10.97 | $30.92 | $5.98 | $47.87 | -0.2% |
| China-East-Jiangsu-Suzhou | $13.44 | $30.92 | $7.04 | $51.40 | 0.2% |
| China-East-Shandong-Qingdao | $11.34 | $30.92 | $6.14 | $48.40 | -0.1% |
| China-East-Shanghai | $16.87 | $30.92 | $10.89 | $58.68 | 0.9% |
| China-East-Zhejiang-Hangzhou | $13.92 | $30.92 | $7.24 | $52.08 | 0.3% |
| China-North-Beijing | $23.39 | $30.92 | $11.67 | $65.98 | 1.5% |
| China-North-Hebei-Tianjin | $10.23 | $30.92 | $5.66 | $46.81 | -0.3% |
| China-Northeast-Liaoning-Dalian | $10.08 | $30.92 | $5.60 | $46.60 | -0.3% |
| China-SouthCentral-Guangdong-Guangzhou | $13.49 | $30.92 | $7.07 | $51.48 | 0.2% |
| China-Southwest-Chongqing | $10.45 | $30.92 | $6.53 | $47.90 | -0.2% |
| China-Southwest-Sichuan-Chengdu | $11.48 | $30.92 | $6.21 | $48.61 | -0.1% |
| Czech Republic | $15.84 | $38.17 | $8.37 | $62.38 | 5.2% |
| Denmark | $47.28 | $48.83 | $22.18 | $118.29 | 6.5% |
| Eastern Europe | $14.95 | $43.18 | $7.93 | $66.06 | 6.7% |
| Finland | $31.40 | $36.87 | $15.11 | $83.37 | 2.3% |
| France | $40.15 | $46.91 | $18.95 | $106.00 | 16.0% |
| Germany | $34.67 | $48.75 | $16.86 | $100.28 | 4.8% |
| Hungary | $13.49 | $41.50 | $7.25 | $62.23 | 5.9% |
| India | $2.22 | $35.68 | $2.49 | $40.39 | -0.3% |
| India-Delhi | $2.45 | $35.68 | $2.62 | $40.76 | -0.3% |
| India-Karnataka | $2.85 | $35.68 | $2.98 | $41.50 | -0.3% |
| India-Maharashtra | $2.70 | $35.68 | $2.83 | $41.21 | -0.3% |
| India-West Bengal | $2.59 | $35.68 | $2.71 | $40.98 | -0.4% |
| Indonesia | $1.26 | $32.00 | $1.80 | $35.05 | 1.2% |
| Ireland | $34.26 | $45.47 | $16.54 | $96.27 | 5.5% |
| Israel | $19.03 | $37.47 | $9.95 | $66.45 | 2.2% |
| Italy | $24.17 | $65.41 | $11.90 | $101.48 | 3.7% |
| Japan | $14.21 | $40.63 | $8.56 | $63.40 | 3.5% |
| Malaysia | $4.93 | $36.08 | $3.57 | $44.58 | 9.5% |
| Mexico | $6.27 | $50.22 | $4.20 | $60.69 | -0.1% |
| Mexico-Mexico City | $8.51 | $50.22 | $5.28 | $64.02 | -1.0% |
| Mexico-North | $6.80 | $50.22 | $4.45 | $61.47 | -0.5% |
| Mexico-South-West | $4.97 | $50.22 | $3.58 | $58.77 | 0.2% |
| Netherlands | $35.71 | $44.48 | $17.12 | $97.31 | 9.2% |
| Norway | $42.04 | $39.72 | $19.96 | $101.71 | 3.9% |
| Philippines | $1.94 | $41.15 | $2.15 | $45.24 | 3.7% |
| Poland | $16.93 | $39.45 | $8.65 | $65.03 | 11.0% |
| Portugal | $13.23 | $40.51 | $7.46 | $61.20 | 8.3% |
| Romania | $12.98 | $46.15 | $7.06 | $66.18 | 5.3% |
| Russia | $5.13 | $37.35 | $3.91 | $46.39 | -2.9% |
| Russia-Altaiski Krai | $3.20 | $37.35 | $2.73 | $43.27 | -3.0% |
| Russia-City of Moscow | $9.33 | $37.35 | $7.12 | $53.80 | -2.8% |
| Russia-Kaluga | $4.68 | $37.35 | $3.57 | $45.59 | -3.0% |
| Russia-Leningrad | $5.40 | $37.35 | $4.13 | $46.88 | -2.9% |
| Russia-Moscow region | $6.46 | $37.35 | $4.94 | $48.75 | -2.9% |
| Russia-Republic of Dagestan | $2.81 | $37.35 | $2.55 | $42.70 | -3.0% |
| Russia-Saint Petersburg | $7.35 | $37.35 | $5.31 | $50.00 | -2.9% |
| Russia-Sverdlovsk | $5.41 | $37.35 | $4.14 | $46.90 | -2.9% |
| Russia-Tyumen | $12.79 | $37.35 | $9.80 | $59.93 | -2.7% |
| Russia-Udmurtia | $3.71 | $37.35 | $2.96 | $44.02 | -3.0% |
| Saudi Arabia | $12.03 | $32.87 | $7.01 | $51.90 | 45.8% |
| Singapore | $31.59 | $56.66 | $15.65 | $103.90 | 5.7% |
| Slovakia | $13.53 | $53.58 | $7.44 | $74.55 | 5.0% |
| South Africa | $6.78 | $37.77 | $4.56 | $49.12 | -1.1% |
| South Korea | $21.61 | $36.71 | $11.01 | $69.33 | 6.9% |
| Spain | $20.14 | $37.34 | $10.43 | $67.91 | 9.2% |
| Sweden | $26.42 | $38.51 | $13.21 | $78.14 | 6.5% |
| Switzerland | $62.12 | $55.57 | $23.42 | $141.11 | 7.5% |
| Taiwan | $10.26 | $40.77 | $6.24 | $57.27 | 5.2% |
| Thailand | $2.28 | $33.40 | $2.38 | $38.06 | 3.8% |
| Turkey | $4.81 | $88.20 | $4.37 | $97.38 | 13.8% |
| USA | $38.13 | $43.17 | $18.34 | $99.65 | 0.5% |
| USA-California | $44.30 | $43.17 | $21.30 | $108.77 | 0.5% |
| USA-Central (AR-IA-KS-MT-NE-ND-OK-SD) | $30.24 | $43.17 | $14.71 | $88.12 | 0.5% |
| USA-Mid-Atlantic (DE-MD-PA-VA) | $39.88 | $43.17 | $19.18 | $102.23 | 0.5% |
| USA-Mountain (AZ-CO-ID-NV-NM-UT-WY) | $33.78 | $43.17 | $16.31 | $93.27 | 0.5% |
| USA-North Central (IL-MI-MN-OH-WI) | $36.51 | $43.17 | $17.58 | $97.26 | 0.5% |
| USA-Northeast (MA-NY-NJ-CT) | $47.35 | $43.17 | $22.78 | $113.30 | 0.5% |
| USA-Northeast-Rural (ME-NH-RI-VT) | $34.37 | $43.17 | $16.60 | $94.14 | 0.5% |
| USA-Pacific (WA-OR-HI-AK) | $36.12 | $43.17 | $17.39 | $96.68 | 0.5% |
| USA-Southeast (AL-FL-GA-IN-KY-LA-MO-MS-NC-SC-TN-WV) | $32.37 | $43.17 | $15.66 | $91.21 | 0.5% |
| USA-Texas | $38.37 | $43.17 | $18.46 | $100.00 | 0.5% |
| United Kingdom | $26.93 | $50.62 | $13.76 | $91.31 | 17.5% |
| Vietnam | $1.75 | $36.59 | $2.16 | $40.50 | 10.7% |
| Western Europe | $32.31 | $47.77 | $15.64 | $95.72 | 9.5% |
Updated Machine Names¶
This table lists the machines that were updated relative to the 2024-06 Regional Data Libraries release. These changes are text updates to the names of these machines.
| UPDATED MACHINE NAMES – Process Group | UPDATED MACHINE NAMES – Process | UPDATED MACHINE NAMES – New Machine Name |
|---|---|---|
| Surface Treatment | Conveyor Abrasive Finishing | GARBOLI GPS BELT |
| Surface Treatment | Conveyor Shot Blast | Binhai Abrator Q485 |
Material Rates¶
In 2024-09 RDLs, cold worked steels now have a different price than hot worked steels of the same material composition. Previously, these incorrectly showed the same price. Due to the extra processing required, unit costs for cold worked steels are now 14% higher than hot worked steels. This is in line with global market expectations for the difference between these types of steels, and the extra processing required to produce cold worked steels.
Aluminum prices have dropped by 3.6%, due to several factors. Concern over a recession in the US, and a shortage in China, driven by rising consumption, has pushed prices up. Other factors also include a curtailment of production in Australia, and the ban on Russian aluminum. A sustained demand from China's clean energy sector is expected to cap price losses.
Gray Iron is up 4% in our current release. The gray cast Iron market has remained relatively stable, despite fluctuations in the broader steel and iron markets. This stability reflects consistent demand from downstream sectors, particularly the construction industry, which is showing signs of growth.
In the United States, the steel spot market has experienced some volatility, but steel mills have maintained a steady demand for gray cast Iron. The availability of iron and steel scrap has fluctuated, which could potentially impact gray cast Iron production costs.
Galvanised Steel is down 14.5%. Increased steel exports from China, driven by the domestic slowdown in the construction market, have led to depressed international steel prices. This global impact of China's overproduction suggests that the steel market downturn may continue into 2025.
Polypropylene is up 7.4%. August specifically saw price increases for polypropylene (PP) and other polymers due to tight monomer supplies and rising freight costs. Buyers remain cautious, balancing the need for inventory with concerns about price sustainability. The ongoing geopolitical tensions in the Middle East continue to influence crude oil and polymer prices, with potential for upward pressure if conflict escalates.
These are the material rate changes relative to the 2024-06 Regional Data Libraries release:
| Non-Ferrous | Non-Ferrous | Ferrous Metals | Ferrous Metals | Plastics | Plastics |
|---|---|---|---|---|---|
| Aluminum | -3.6% | Ductile Iron | 3.7% | HDPE - Extrusion Sheet | 7.0% |
| Aluminum Bronze | 1.0% | Galvanized Steel | -14.5% | PP - Extrusion Sheet | 7.4% |
| Brass | 1.8% | Low-Alloy Steel | -2.4% | PS - Crystal Injection GP | -0.6% |
| Bronze | 1.8% | Malleable Cast Iron | 4.3% | PS - High Impact Extrusion | -0.6% |
| Copper | 1.2% | Stainless Steel | -2.6% | Polypropylene | 7.3% |
| Gray Iron | 4.0% | Steel | -1.3% | Polystyrene | -0.6% |
| Heat Resistant Super Alloys | 1.1% | Unalloyed Steel | -3.0% | ||
| Magnesium | -0.9% | ||||
| Titanium | 0.6% | ||||
| Zinc | 3.6% | ||||
| Zinc-Aluminum | 2.4% |