Cost and quality concerns bring manufacturing back to the UK

Gurjit Degun
28 November 2013

Cost cutting, improving quality and reducing lead times are the top reasons why small to medium-sized manufacturers are looking to bring production back to the UK.

The Manufacturing Advisory Service’s latest Barometer found a quarter (26 per cent) of the 500 respondents said concerns over the cost of offshore production were the main reason for reshoring. A fifth said they wanted to improve quality, and 18 per cent noted a desire to shorten lead times.

However, firms said the biggest barrier for bringing production to the UK is the cost of domestic labour. Nearly one in 10 are also concerned about the availability of the right skills.

According to the Barometer, 15 per cent of firms reported they have or are in the process of bringing production back to the UK. This compares to the 4 per cent that have offshored in the past year.

Steven Barr, head of the Manufacturing Advisory Service, said: “Buyers have realised there is more to the ‘landing’ price than meets the eye, with delays in logistics and issues around quality adding a whole layer of hidden costs.

“It appears that bringing production back is having a really positive impact on the bottom line, with 68 per cent of firms that have reshored in the past 12 months reporting an increase in sales.

Business minister Michael Fallon added: “These findings are another sign that the economy is heading in the right direction and confidence is returning as we move from rescue to recovery. The number of firms looking to bring production home is particularly welcome with the additional investment and jobs this could bring.”

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