As Brexit and Covid dismantle supply chains, ‘reshoring’ boom leads to revival of UK manufacturing

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Saturday, April 16, 2022 9:26 a.m.

As the government admitted last week there are ‘significant challenges’ to UK stock levels due to Brexit and Covid, so is relocation perhaps the answer?

Last week’s government report, from the Office for National Statistics (ONS), revealed the full extent of falling stock levels and the disruption of global supply chains following Brexit and the Covid pandemic.

“UK Stock and Supply Chain Issues” examines the impact of Brexit, Covid, the Suez Canal blockage and other issues.

The report states that “in recent years, exit from the EU, the coronavirus (COVID-19) pandemic, rising energy and commodity prices and events such as the blockage of the Suez Canal have presented businesses with significant challenges when acquiring and maintaining their inventory. .”

The ONS said: “As a result of these challenges, the UK has experienced heightened trade uncertainty, supply chain issues for a variety of materials and products resulting from global shortages and rising inflation.”

Relocation

Following the findings, some industry leaders say ‘reshoring’ – bringing manufacturing back to the UK – will help avoid the impact of breaking strained global supply chains.

The report reveals the full extent of manufacturing and retail issues, said David Jinks, head of consumer research at international delivery company ParcelHero.

Jinks said AM City that manufacturers, retailers and their delivery and logistics partners will need to plan for growth in relocation (return of manufacturing to the UK) as global supply chains separate.

“The ONS report has laid bare the problems manufacturers and retailers have been having in maintaining stock levels during Brexit and the pandemic and reveals they continue to struggle,” he said. declared.

“The report surely undermines Jacob Rees-Mogg’s extraordinary claim that Brexit is ‘already a success’.”

david jinx

Jinks continued: “The report surely undermines the extraordinary assertion by Jacob Rees-Mogg, Minister for Brexit Opportunities, that Brexit is ‘already a success’, has been ‘hugely beneficial to the country’ and that ‘proof that Brexit has caused a decline in trade is rare and far between.

Made in Britain

Today, many iconic British brands are no longer made in the UK.

For example, MG cars are now built in China and Raleigh cycles and Morphy Richards irons in the Far East.

Even Brexit supporter James Dyson now manufactures its vacuum cleaners in Malaysia and moved its headquarters to Singapore in 2019.

“It’s hard to believe, but even the basic British HP sauce, named after the Houses of Parliament, has moved production to Holland,” Jinks pointed out.

Manufacturing Renaissance

Despite all these supply chain issues, Britain is still the ninth largest manufacturing nation in the world, producing £183bn worth of products and employing 2.5million people.

“It’s a good base to build on. UK logistics and delivery companies will soon have to adapt to a growing UK manufacturing base. The war in Ukraine can only accelerate this,” Jinks said.

In fact, British manufacturing could be on the verge of a rebirth in response to these challenges, he pointed out.

For example, manufacturing company Albert Jagger Engineering has started relocating its Antiluce range of bindings to the UK from China.

It will see the company return to its Bloxwich facility for the first time since the early 2000s. The company says it is moving its manufacturing process back to the UK ‘to improve control over every step of the chain of production,” Jinks said.

Ted Baker and Boohoo

The fast fashion industry also reacted quickly.

Ted Baker introduced its Made in Britain range and this year Boohoo learned from its previous supply chain issues and opened its own 23,000 square foot factory in Leicester.

Returning manufacturing to the UK has significant benefits, including reducing the carbon footprint of products, reducing delivery times and costs, and ensuring quality through continuous monitoring rather than relying on samples.

Additionally, trade body Made UK recently said manufacturing was coming back to Britain from around the world.

40% of relocations come from China, more than 30% from Eastern Europe and nearly 20% come from India.

“He thinks we’re on the cusp of a fourth industrial revolution that could lead to a shrinking workforce. This would mean relocating low value items to the UK,” Jinks said.

Not out of the woods

Despite the encouraging signs, the ONS findings reveal that UK businesses are not off the hook.

While writing his report, he received feedback from companies in a variety of industries, including manufacturing, construction, and retail.

The companies complained in particular that they had stockpiled for the first Brexit date of March 29, 2019, which was later scrapped.

“The rise in comments citing supply chain issues over the past three quarters indicates that businesses are continuing to struggle,” the report said.

“The comments also show that this is the result of current economic conditions, the UK’s exit from the EU customs union and single market, and other issues such as the coronavirus pandemic (COVID- 19) and general supply chain issues,” the ONS said. added.

“This could see a UK-badged product being assembled in the Far East using Chinese microchips, Japanese case components and Russian palladium,” Jinks commented.

“With all of this in mind, it’s no wonder the long-established global supply chain model is collapsing,” he concluded.

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