A GROWING number of manufacturers have decided to bring overseas production back to the UK in the last three years, strengthening local supply chains.
These are the findings of a new report produced by EEF, the manufacturers' organisation, in collaboration with law firm Squire Sanders. The study found 16.6% of firms have 're-shored', up from 14.2% in 2009.
The report, 'Backing Britain - a manufacturing base for the future', also found the same proportion of companies have turned to a UK supplier for parts and components.
The survey claims the trend is set to continue with 6% of companies saying they are planning to re-shore production in the next three years.
Around a third of companies polled said the main reason for bringing production back to the UK was to improve quality. Just over half said delivery schedules had contributed to the decision and 17% cited cost. The survey was based on responses from 270 firms in December.
EEF chief executive, Terry Scuoler, said: "The trend may be gradual but 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. It is now key that government policy supports the most competitive business environment possible so that we continue to see more high value innovative manufacturers invest in and sell from the UK."
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. Even in terms of cost, the UK now compares very favourably as a destination of choice, particularly as wage pressure in Eastern Europe and the Far East have started to bite in those markets."
In particular, he said the report highlighted a continuing recent trend in the automotive sector of localisation by OEMs to bring their key suppliers and supply chains closer to home. This was helping to prevent traditional supply chain risks of shipping delays, global economic pressures and natural disasters such as the Japanese earthquake of March 2011.
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