Half of manufacturers to bring work home
Fifth of firms to rely less on EU partners in future, as coronavirus casts shadow over global supply chains
ALMOST half of British manufacturers are planning to rely more on UK suppliers in future after coronavirus exposed major flaws in global trade.
In total, 46pc of companies surveyed by trade body MakeUK said they planned to bring work back home over the next two years.
The proposals offer a small ray of hope amid rising concerns about mass layoffs, with a record 23pc of smaller companies already forced to cut jobs in the past three months, according to a separate survey by the Federation of Small Businesses.
Coronavirus triggered chaos in global supply chains as factories around the world were forced to shut, seriously disrupting plants which rely on a rapid, predictable flow of parts. It is thought to be triggering a rethink in the boardrooms of firms which have long supported globalisation.
Worries about Brexit and heightening tensions with China have also driven the change of focus.
A fifth of Britain’s industrial businesses said they would reduce their dependence on suppliers in the European Union, while 28pc planned to source fewer supplies from the Asia Pacific region. Weaknesses in international supply chains were brought into sharp relief when the NHS struggled to buy vital equipment such as gloves and gowns to protect medics.
Much of the world’s supply of PPE comes from China and rocketing global demand meant prices surged, if products could be purchased at all.
Jacob Sallon changed output of his Cheshire-based family firm Gravitas International from fabrics used in construction and flood protection to making protective aprons during the pandemic. He said the enthusiasm for so-called reshoring was no surprise. Mr Sallon said: “Hundreds if not thousands of manufacturers worked out we could change production with the Government will to do it behind us.
“With demand large enough and government providing the capital we need, we can now supply aprons as competitively as China can.”
He added that domestic production of critical kit made it easier to ensure the necessary high standards were enforced.
John Neill, chairman and chief executive of automotive business Unipart Group, said the crisis had taught companies the importance of being able to manufacture products onshore – but that higher costs in Britain meant staying competitive would still be a challenge.
He added: “Many manufacturing processes were offshored for cost reasons and while there is definitely a renewed appetite for domestic supply chain resilience, companies may still be nervous about making their end products more expensive in a competitive market.”