From the Daily Mail:
‘Once in a generation’ opportunity to bring manufacturing back to Britain and provide £15bn boost to economy and create 315,000 jobs
- Wage increases in developing countries means the advantage of manufacturing abroad is dwindling
- Demand is rising for the ‘Made in Britain’ label
- 15 British firms have already ‘reshored’
Bringing manufacturing back to the UK is a ‘once in a generation’ opportunity which could provide a £15bn boost to the economy and create 315,000 jobs.
A report by accountancy firm Ernst & Young argues the time is ripe to repatriate manufacturing to regions which were hit hard by firms ‘offshoring’ jobs to developing countries.
According to its study, the economics that underpinned the boom in offshoring in the 1980s and 1990s, such as cheap labour, ‘appear to be reversing’.
It cited growing wages in countries such as China and the pressure on retailers to transport clothes from factories to the shop floor quickly. There is also an increasing demand for the ‘Made in Britain’ label.
The report, Reshoring – Time To Seize The Opportunity – said that the defence, aerospace and automotive industries would see the biggest benefit, while the regions which would prosper the most include the North West (an extra £2.4bn for GDP and 46,200 jobs), the West Midlands (£1.8bn GDP and 35,000 jobs) and the South East outside London (£2bn and 35,000 jobs)
Mark Gregory, EY’s chief economist and author of the report, said: ‘While increasing wages in developing countries are eroding their labour cost advantage, there are many more factors driving businesses to choose British shores.
‘The desire to guarantee quality and the imperative to reduce time to market are increasingly important drivers of location decisions.’
It is estimated that about 15 British firms have already ‘reshored’.
These include Bathrooms.com, which is investing £2.5m in Dudley to manufacture 25 per cent of its products, and clothing retailer Jaeger has committed to bringing 5 per cent-10 per cent of production back from Asia.