Manufacturing coming home

Dec 30 2009 By Andrew Mernin

MANUFACTURERS are moving production back to the UK from overseas amid concerns over quality and the high cost of freight, it was reported today.

One in seven firms surveyed in a report by the manufacturing group EEF and accountants BDO said they had switched back to the UK in the last two years, according to The Times.

Companies have been attracted by cheaper labour in Eastern Europe or Asia, but the EEF said 14% had moved production back to the UK because the cost savings had not been as great as expected.

Increased freight, energy and commodity costs have made producing goods overseas more expensive for manufacturers.

Other reasons to return to the UK were that goods from abroad were below quality standards and that products were not delivered to market quickly enough.

Nearly seven in 10 firms agreed that the UK was a competitive location for manufacturing, compared to just 43% two years ago.

The report surveyed 300 businesses, including the makers of mechanical equipment, plastics, food and those supplying goods for the automotive industry.

It found that two thirds planned to re-evaluate their supply chains as a result of the global recession.