Engineering news
British manufacturers are to hire more staff to cope with an expected surge in demand caused by a “reshoring” of production to the UK, a leading inward investment organisation has claimed.
Almost a third (32%) of senior decision makers from the British manufacturing industry who currently use overseas suppliers say their firm plans to source more components from UK companies over the next five years, according to a survey by Business Birmingham.
Rising costs overseas (59%), and simpler transport and logistics (51%), were amongst the most widely cited factors by the 41% of respondents who reported that the UK is becoming more attractive as a manufacturing destination compared with locations abroad.
The findings have been welcomed by the manufacturers' organisation the EEF, which said that it had also heard anecdotal evidence of the reshoring trend.
Lee Hopley, EEF chief economist at EEF, said: “We are hearing more reports of companies looking to source materials and other services in the UK. This is another sign of industry’s growth potential.
“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.”
The survey also revealed that more than half (51%) plan to boost production capacity in the UK in the next five years, and nearly two-thirds of these (56%) say they are likely to hire more staff.
Wouter Schuitemaker, investment director at Business Birmingham, said: “Re-shoring can help us rebalance our economy, create new jobs and cut our trade deficit. It’s vital that we back our manufacturers and pull out all the stops to support those who are bringing manufacturing home.
“The West Midlands sits at the heart of the UK’s manufacturing sector, and the strength of our supply-chain and R&D means that when companies like Jaguar Land Rover are looking to invest and grow in the UK, they know we can match their ambitions.
“We need to make sure that businesses along the supply chain are not burdened by regulations such as those around visas, and are not disadvantaged by high energy costs.”