Midland manufacturers are increasingly bringing production back in-house – reversing outsourcing trends to China and Eastern Europe of recent years, a new survey shows.
Key findings of an EEF/Squire Sanders survey showed that one in six companies re-shored production in-house in the last three years, and a similar number re-shored sourcing to a UK based supplier.
China was the main country from which to re-shore, followed by Eastern Europe, with the main reasons cited as improved quality, delivery and minimised logistics costs.
EEF Chief Executive Terry Scuoler said: “The trend may be gradual but it is highly encouraging to see more re-shoring continuing. 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.”
Simon Garbett, partner in Squire Sanders’ global manufacturing and automotive industry group based in Birmingham, added: “This report highlights the cyclical nature of manufacturing. Whilst moving any manufacturing operation across borders is a significant decision for management, strikingly the report shows that this is not motivated solely by cost, but often by a drive to improve the quality of what is being produced and enhance overall customer service and satisfaction.
“With a long history of manufacturing in the Midlands, local businesses have established a reputation for making high quality products, particularly in specialist sectors such as automotive, aerospace and defence, and re-shoring is testimony to their achievements, once again giving UK manufacturing a competitive edge in the global market place. In terms of cost, the UK now compares very favourably as a destination of choice.”
