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12 August 2013 | Ceri Allan
Some two-thirds of UK companies would consider bringing manufacturing back to Britain or Europe as satisfaction with Chinese suppliers has fallen.
According to a survey of 1,124 businesses by Versapak, 67 per cent of respondents said they would consider a return to the UK or Europe for manufacturing if the market forces were right.
38 per cent of the respondents who were considering such a move said they were “already in discussion” to return to the UK or Europe for manufacturing, citing the unreliability of overseas production.
The five most frequent problems experienced with manufacturers in the far east were:
1. Difficult communication – 48 per cent
2. Rising prices – 48 per cent
3. Long lead times – 40 per cent
4. Poor quality of production – 35 per cent
5. Large minimum order quantities – 32 per cent
Figures for July showed unexpected growth in both imports and exports to and from China. There was a sharp recovery from June, with exports rising by 5.1 per cent and imports gaining 10.9 per cent. In June, exports had fallen 3.1 per cent and imports 0.7 per cent.
But Leon Edwards, group managing director of Versapak, told SM that China will have to show improved rates for more than just a month before decisions change.
“Despite China's recent import/export improvements, there is an underlying feeling that whenever possible local manufacturing is the preferred option. Five years ago, it felt like firms had to work hard to justify keeping manufacturing in Europe. Now, it's reversed and they are looking for a reason not to move or to move back. From what we've heard, I think we need to see a consecutive period of improvement for that mindset to shift again.”