More British manufacturers are taking their companies back to the UK after decades of experimenting with operations in developing countries.
One in six companies has “reshored” production in the last three years, up from one in seven reported in 2009, according to manufacturers’ association EEF in its Backing Britain report.
Companies have been influenced by the rising costs of production in emerging nations, but also the need to deliver quality and expertise.
Being able to deliver high-quality products was the prime reason for repatriating production for many companies, most especially so for smaller companies where reputation can be ruined by one inadequate product. Quality was the prime reason given by 50% of the smaller companies.
Manufacturers appear also increasingly aware of their need for greater flexibility and competitiveness. They are seeking shorter supply chains which should enable shorter delivery times.
About a third of companies said this was the prime reason to reshore. One quarter said domestic production should help meet deadlines. Natural disasters, international transport failures and increasingly congested cargo terminals have all hampered deliveries.
“Almost half of manufacturers believe the quality of goods sourced from lower labour cost countries is getting better, with larger companies seemingly better able to secure quality improvements, but confidence that overseas operators will supply to the required specification is not sufficient to many,” the report said.
Three in five companies said their profits had gone up as a result of taking the production back to the UK.
