Czech Republic Remains the Best Manufacturing Destination in Europe and No.5 Globally

czech manufacturing

The Czech Republic once again ranks high in the rating of the 47 best manufacturing destinations.

Thanks to a good score in all criteria such as operating costs, labour, political and economic risk and the ability to bounce back after the coronavirus crisis, the country came fifth globally – closely following the top manufacturing destinations of China, India, the USA and Canada – and first in Europe.

The Czech Republic swapped positions with Canada this year largely due to an increase in labour cost across the CEE Region.

That became the biggest obstacle to plans for reshoring to CEE countries, which was to be one of the potential responses to the disruption of supply chains during the pandemic. Despite that, Lithuania (No.7) and Poland (No.10) still rank among the top ten countries.

Out of Western European countries, Spain ranks the highest, making a big leap from last year’s No.29 to this year’s No.12 thanks to improving its economic and political stability and reducing labour costs.

In terms of costs (of labour, energy and property), the Czech Republic is not among the cheaper countries, ranking within the second quarter of the index. Out of European destinations, the countries that outperform Czechia include Lithuania (No.9, the best in Europe), Russia, Bulgaria, Turkey and Romania.

Even so, the local costs are low enough, when combined with the other parameters rated, to make our country the perfect destination for locating a manufacturing plant.

Jiří Kristek, Partner and Head of the Industrial and Retail Warehousing Team, Cushman & Wakefield: “The Czech Republic has a good position from the viewpoint of international corporations that make decisions on locating their production plants. It excels primarily with a favourable combination of essential factors that determine such strategic decisions. It is not the least costly – Asian countries outperform Czechia in terms of cost-effectiveness, and countries such as the USA and Germany fare better in terms of risk. However, taking into account all the parameters that the Czech Republic offers, it is the optimum country to make investments in.”

Recovery from the crisis

This year is the second time the index has assessed the countries’ ability to bounce back from the coronavirus crisis. The parameters rated are the percentage of vaccinated population and the anticipated GDP growth. In this respect, the Czech Republic ranks in the second quarter of all the countries in terms of the positioning for a restart, with China, Ireland, and the Netherlands holding the first three positions.

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