Time for UK Manufacturing to fight back?

I read an article on the Express website yesterday with interest, which was detailing how UK-based fashion companies are now beginning to bring back manufacturing operations to these shores from the traditional “low-cost” countries, such as China, due to rising labour costs. Not least because I predicted in my blog a couple of months ago that this would slowly start happening more and more this year!

The UK clothing and textiles manufacturing industry has had a torrid time over the past 20 years, with countries in the Far East offering much lower priced materials and labour costs, with the difference being so large that this more than compensated for the increased transport costs.

However, countries in these previously low-cost countries are now starting to ask for much higher levels of remuneration, and when this is combined with the aforementioned transport costs, it means that there is often very little difference in manufacturing products there or on our own shores.

I mentioned in a previous blog that manufacturers had also been looking at bringing operations closer to home, as there are also environmental issues which have had a major impact on business.  The recent earthquakes in Japan (and subsequent tsunamis) lead to a major delay in vital components being delivered to the manufacturers.  This lead to a huge loss in revenues for businesses, as they could not complete products without these components, and were left with a lot of “half-finished” products on site.  There have been whispers in the automotive sector that this could not be allowed to happen again, and that there could be actions to bring back the manufacturing from the affected areas to somewhere which was less unstable and, perhaps more importantly, closer to home.

Could the changes in the clothing and textile industry be a sign of things to come for other sectors in the UK?  Will parity in costs with the Far East mean that manufacturers will centralise more operations in the UK, and provide a much-needed boost to UK manufacturing?  Has your company started to look at these issues in a different light?

I’m keen to hear your opinions on this and would welcome any comments, which can be left below.