Industrial re-shoring bringing Business back to Britain

Posted on 4 March, 2014 by Kirsten Kennedy

For many years, numerous British firms have chosen to locate an aspect or even their entire manufacturing operations overseas as a means of reducing costs. This, for the most part, is due to employment laws in countries such as China and India allowing companies to pay workers less per hour than in the UK, making productivity more profitable.

Industrial-re-shoring-bringing-Business-back-to-Britain

However, as the wage gap between China and the UK has started to decrease, many firms are choosing to “re-shore” their manufacturing operations and take advantage of the industrial boom currently prevalent in the UK.

According to a survey conducted by trade body EEF, in association with law firm Squire Sanders, around one in six companies have chosen to bring manufacturing back to the UK in the past 3 years compared to only one in seven in 2009 – a trend which experts predict will increase in the future.

Chief executive of EEF, Terry Scuoler, says; “While it will always be two way traffic the need to be closer to customers, to have ever greater control of quality, and the continued erosion of low labour costs in some competitor countries means that in many cases it makes increasingly sound business sense.”

The survey also found that companies which re-shored production had, for the large part, benefited from the decision with 40 per cent of respondents reporting a rise in turnover. Furthermore, 60 per cent had experienced a moderate increase in profits, leading to employment growth to keep up with demand.

Unfortunately, although EEF revealed that six per cent of companies surveyed intend to re-shore production within the next three years, there remain several key issues which make Britain an unattractive destination.

The major worry for most businesses questioned on this matter was the rising cost of energy, whilst many also voiced concerns regarding the diminishing number of UK skilled workers – something which has been highlighted as a major inhibiter to growth by economists and analysts since the end of the recession.

Business Secretary Vince Cable welcomed the findings of the survey at EEF’s national manufacturing conference on Tuesday, at which he pledged the government’s support in helping “rebuild British manufacturing prowess, which we will exploit to bring more work to these shores.

“Britain winning back business on the basis of quality and good performance is a good characterisation of the sort of industrial strategy that I have been promoting.

“We are now seeing a number of encouraging signs of production returning to the UK,” he said.

With Britain becoming an increasingly powerful player in manufacturing, this trend can only add to growth, job creation and demand for industrial property. However, the issue of a shortage of skilled workers remains a difficult obstacle to overcome.




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

Interest Rates Impact on Commercial Property

Commercial Property Investment Outlook for 2023

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants