Manufacturing returns to the UK

Manufacturers are increasingly moving production back to Britain as shoddy quality and higher freight prices are undermining the cost advantage of producing goods overseas says a report into the state of the manufacturing sector by the EEF and accountants BDO. It finds that one in seven companies surveyed had moved production back to the UK from abroad in the past two years

Many British manufacturers have outsourced production to countries with lower labour costs, in Eastern Europe or Asia, in the past decade, a trend that has accelerated as an increasing number of British companies have fallen into foreign ownership. But higher freight, energy and commodity costs have increased the expense of production overseas, while the recession has put pressure on companies to re-evaluate decisions on location.

The EEF’s survey of manufacturers presents an unexpectedly optimistic picture of the UK’s manufacturing base in a year when headlines have been dominated by concerns for jobs at Corus, BAE Systems and Vauxhall, some of the country’s biggest manufacturers. Two thirds of the 300 businesses surveyed for the report — which include makers of mechanical equipment, plastics manufacturers, food manufacturers and suppliers to the automotive industry — plan to re-evaluate their supply-chain strategies as a result of the global recession.

APA Director General, Gareth Osborne, who has owned and operated a number of manufacturing businesses in his time said, “It will not be a flood back [to the UK] but quite a few companies seem to be looking again at the advantages of manufacturing nearer to home. Something I never thought I would see again.”

The weaker pound has also helped to make production in the UK more cost effective because the cost of imports has risen.

APA strongly supports UK manufacturing.

APA