Manufacturers bring back production to the UK as overseas production costs escalate

Small and medium sized businesses are bringing back production to the UK as costs are escalating abroad.

A survey from the governments’ Manufacturing Advisory Service revealed “quality, cost and delivery” is bringing production back home.

The group’s National Barometer found more than a quarter of companies surveyed said the cost of offshore production was the principal reason for “re-shoring”.

Despite the move back home, for some businesses the cost of labour in the UK is still the biggest barrier for producing here.

Steven Barr, head of the Service, said: “There is certainly a growing desire from our companies to take production home, with 15 per cent of firms reporting that they have or are in the process of bringing production back. This marks a major change in approach from five years ago when the Far East and Eastern Europe seemed to be the destinations of choice.”

Mr Barr also said there was a surge in the number of firms investing in new technologies. He said: “This is at a two-year high which tells us that manufacturers are not only optimistic about the next six months, but also have one eye on the longer-term picture.”

The Manufacturing Advisory Service surveys 500 manufacturing firms every quarter to produce the National Barometer.