MANUFACTURERS are bringing their business back to the North East in an effort to head off rising operating costs abroad.
Some of the region’s leading firms gathered at an event organised by Deloitte to discuss how wage inflation, security of supply and rising costs are leading companies to re-shore their work.
Simon Manning, head of manufacturing at Deloitte in the North East said: “Re-shoring has certainly become more attractive to the region’s manufacturers who are still faced with rising costs.
“Where international supply chains were once a very attractive solution, it is no longer as clear cut.
“As well as being good news for manufacturers, this is also a positive step for the region’s supply chain.”
Average wages in China and oil prices have tripled since 2000 meaning overseas supply chain and transportation costs now make re-shoring a much more viable option.
Figures from the Office for National Statistics show that manufacturing output, which accounts for 7% of the UK economy, rose by 1.1% in March following a 0.7% increase in February – well above economists’ predictions of a 0.3% rise.
“North East exports in specialised manufacturing were up 24% last year, further demonstrating that the region’s advanced manufacturing sector is a local and national economic success story,” said Manning. “However if it is to continue to grow and remain competitive, it needs to attract the brightest, most talented school leavers and graduates.”