Stat of the month: Bringing it back home

14% - Proportion of UK manufacturers repatriating production in the past two years.

Last Updated: 31 Aug 2010

The death of British manufacturing may have been exaggerated. Car sales, for example, were up nearly 58% in November 2009 on the previous year's figures, thanks largely to the car scrappage scheme; and although most cars aren't made in the UK, many parts for them are. It might seem counter-intuitive, given the received wisdom that says offshore outsourcing is essential to secure the lowest possible per-unit cost, but many companies are bringing manufacturing operations back to the UK.

Manufacturers now realise that customers will pay a premium price for a premium service, and it's easier to give customers what they want when the factory is just down the road. Many companies may have initially looked abroad to cash in on cheap labour and freight, but such a move has a price. For a start, higher fuel costs make it more expensive to ship goods around the world, and it's bad for a firm's CSR reputation.

What's more, the weakening of sterling against the euro and the US dollar has given manufacturing a welcome competitive boost. 'I'm backing Britain,' as the 1968 slogan used to say.

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