British Manufacturing Expected to See Renaissance

Companies repatriate manufacturing jobs as demand for British products rises.

British manufacturing is “booming again.” Orders and output have been rising at their fastest peace in nearly twenty years and this headline figure is just the latest good news for the island nation.

The death of British manufacturing may have been exaggerated to begin with. It still employs more than 8 percent of British workers and accounted for 12 percent of the United Kingdom’s economic output in 2010. More impressively, manufacturing accounts for 83 percent of Britain’s exports.

The car industry is a case in point. It grew 7 percent in July when it had produced nearly 900,000 vehicles in 2013 alone — still a far cry from the almost two million cars that were made in 1972, when British auto manufacturing peaked, but carmakers don’t just make cars. Rolls Royce, for instance, also makes engines or aircraft. Britain boasts a 15 percent global marketshare in aerospace.

Even industries that were once written off are seeing a resurgence. In the 1930s, on the back of its textile industry, the League of Nations identified Leicester as the second richest city in Europe. Decades after its decline, textile is going through something of a renaissance. The trust brand John Lewis is due to “repatriate” textile manufacturing, wanting British goods to contribute at least 12 percent to its business turnover by 2015. Arcadia owner Sir Philip Green also caused a stir last year when he announced plans to increase the number of British factories in his supply chain 20 percent. Such developments mainly benefit the old textile heartland, including Leicester and the more northern country of Lancashire.

These are not the only firms bring manufacturing back. A survey from the Engineering Employers Federation conducted last year found that 40 percent of British companies had brought at least some production back home.

One reason for this trend is genuine consumer demand for British-made goods — both at home and abroad. More than half of British consumers thinks all British brands should bring manufacturing back to the United Kingdom.

Another reason is that by 2015, British manufacturing costs are expected to be just 13 percentage points higher than China’s. Add in improved quality controls and delivery times and the slightly higher cost of producing in Britain instead of Asia is worth the effort.