11 March 2014

UK reshoring to boost manufacturing

Reshoring work back to the UK could create between 100,000 and 200,000 extra jobs in industries such as textiles, advanced manufacturing and R&D, according to new research.

Analysis from PwC has found that reshoring could boost UK GDP by about 0.4 per cent to 0.8 per cent by the mid-2020s.

There are significant opportunities for the manufacturing industry, according to PwC, but other sectors such as business support services could also benefit.

John Hawksworth, chief economist at PwC, said: "Since the 1990s, there has been a major trend in the UK and other advanced economies for businesses to offshore activities to lower cost emerging economies. However, there are signs that the tide may be beginning to turn, with examples of ‘reshoring' back to the UK starting to crop up in a range of different industry sectors.

"This trend to reshore is still at a very early stage, but our analysis suggests that the impact on jobs and output could build up gradually to material levels over the next decade or so. Of course, some jobs will also still be offshored over this period, but it should be much more of a two way street going forward.

"While the manufacturing industry will benefit, reshoring is also expected to have an impact on internationally mobile services activities. We estimate, for example, that it could create up to 20,000 jobs over the next decade in the areas of research and development, business support services and telecommunications."

Darren Jukes, UK manufacturing leader at PwC, added: "Reshoring offers significant opportunities for UK manufacturing in terms of growth and job creation, particularly in sectors ranging from textiles to the manufacturing of computers, electronics and other machinery.

"It also highlights the highly competitive positioning and attractiveness of the UK manufacturing industry against global competition."

The research is part of PwC's UK economic outlook.