The UK is set to become a “reshoring nation”, the country's prime minister David Cameron announced at this year's World Economic Forum in Davos, Switzerland. During his speech, Mr Cameron highlighted that since 2011 an estimated 1500 jobs that were previously outsourced to lower-cost destinations, were transferred back to the UK. “There are a number of factors pulling companies back home. Some companies are choosing to locate production nearer to their consumer markets in the west. By shortening their supply chains, they can develop new products and react more quickly to changing consumer demand,” said Mr Cameron.
The jobs that returned to the UK are predominantly in labour-consuming sectors such as textiles and call centres, but also included jobs in software production and company headquarters. Examples of businesses that decided to shift some of their operations back home include Symingtons, a food producer, that brought 50 jobs from its Chinese operations back to Leeds, and Jaeger luxury clothes brand, that plans to move 10% of its production back to the UK.
"There is a chance for the UK to become the reshore nation. Europe needs to act now to seize the opportunities of reshoring," said Mr Cameron, while adding that the re-shoring trend is “small, but discernible”.
According to a survey published in November 2013 by Manufacturing Advisory Service (MAS), a government-funded consulting body, in the past 12 months, 11% of companies brought production back home, while only 4% moved production offshore. “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,” Steven Barr, the head of MAS, commented after announcing the survey results. “Buyers have realised that there is more to the ‘landing’ price than meets the eye, with delays in logistics and issues around quality adding a whole layer of hidden costs.”
Other reports from 2013 are less bullish about a manufacturing revival in western Europe. A survey published by YouGov, a market research firm, found only a third of UK manufacturers plan to boost their production in the next five years. A report focusing on western Europe and prepared by Colliers International, a real estate firm, and CoreNet Global, a real estate association, shows a similar trend. While 11% of western European companies are planning to bring production back home in the next three years, four times more respondents declared willingness to ramp up their operations in eastern Europe, Turkey and Asia.