Manufacturing sees a reverse of the tide

According to a recent report by YouGov and Business Birmingham, British manufacturers are expecting to hire more staff to cope with an expected surge in demand caused by a “reshoring” of production to the UK.

Rising costs overseas (59 percent), and simpler transport and logistics (51 percent), were amongst the most widely cited factors by the 41 percent of respondents who reported that the UK is becoming more attractive as a manufacturing destination compared with locations abroad.

The research supports evidence of the re-shoring trend, which is seeing manufacturers respond to rising costs in countries like China by bringing production back to the UK. Since China’s WTO accession in 2001, real wages paid in the manufacturing sector have risen by almost 200 percent in US dollar terms.

For the plastic industry, the positive effects of re-shoring are being felt particularly in the injection moulding and tooling industries, where companies are reporting strong sales. This is leading to an increase in staff hires as well as expansion and investment in equipment and facilities. The effect is likely to have positive reverberations throughout the industry, with many smaller manufacturers likely to feel the benefits of the companies they supply seeking to bring their supply chains closer to home.

Commenting on the report, Ms Lee Hopley, Chief Economist at EEF, the manufacturers’ organisation, said: “There are many reasons for a shift back to Britain, including improving the security of supply chains, the focus on innovation and quality and the rise in employment and transport costs in emerging economies. But whatever the reason, policy-makers need to make sure the UK is a competitive location for investing in modern machinery and innovation, if we are to capitalise on this trend.”

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