Manufacturers bring industry back to the UK

BRITISH manufacturers say they are increasingly bringing operations that they had outsourced to other countries back to the UK, re-shoring production to drive up quality and cut transportation costs.

One in six respondents to a new survey said they have re-shored part of their production chain in the past three years, bringing processes which had been outsourced to the UK, according to manufacturing group EEF and law firm Squire Sanders.

Over 40 per cent of the companies have re-shored operations from China, with many citing a dramatic surge in the country’s wages.

The researchers say that the average minimum wage in China rose by 12.5 per cent each year on average between 2006 and 2010.

“The continued erosion of low labour costs in some competitor countries means that in many cases it makes increasingly sound business sense. It is now key that government policy supports the most competitive business environment possible,” said Terry Scuoler, chief executive of EEF.

More than half of small and medium-sized manufacturers said that improved input quality was a major driving force behind decisions to re-shore some operations, with more certainty on delivery times and reducing logistical costs a greater concern for big businesses.