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

The Daily Telegraph - Business - - Business - By Alan Tovey

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.”

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.