Having once opted to outsource manufacturing to low-cost emerging nations for the purpose of cutting costs, more and more UK businesses are now returning (or ‘reshoring’) elements of their production to Britain. In the last few years alone one in six manufacturers are thought to have done so.
Why is this occurring? One of the main reasons is the rapid increase in labour and energy costs overseas and rising shipping and import costs, which are making outsourcing a much more costly process than many businesses initially anticipate. Beyond this, according to research conducted by EEF, the industry body for engineering and manufacturing in the UK, many businesses are reshoring to improve product quality and delivery times.
However, the reality is that while some UK manufacturers are returning elements of their production to these shores, others are continuing to offshore because in many circumstances it still offers cost saving opportunities. This doesn’t have to be the case. To combat the issue of offshoring in the long term and convince more businesses to reshore, UK manufacturing must focus on continuing to innovate, make efficiency improvements where possible and keep production costs attractive.