Mid-market re-shoring – Engineering Capacity

Research carried out by GE Capital and Warwick Business School reveals that on average, mid-market executives expect, over a three year period, to see an increase in revenues of £3.8m per firm per annum as a result of this domestic relocation, which they estimate will help boost profits by an average 12.1%. Cumulatively, this would add £27.6bn to national mid-market revenues annually, which are already expected to add a projected £133bn in revenues over the next 12 months.

“Historically, re-shoring activity has focussed on regions outside London, yet our research indicates that mid-market firms see the value of being active in the Capital, despite the high costs associated with doing business here. This suggests that rather than acting as an agent for rebalancing the regions, re-shoring may exacerbate the growing disparity between the London economy and the rest of the UK,” said Professor Stephen Roper, Warwick Business School. “,”sans-serif”;>

Ilaria del Beato, chief executive of GE Capital UK, added: “The synergies created by bringing back previously outsourced services to the UK, and closer to London, drive the predicted increase in revenues and will make a positive contribution to a stronger economy. In addition, the re-shoring of these activities will offer greater opportunities for existing and future workforces across the UK.””,”sans-serif”;>

The research found a fairly uniform distribution of activity, with mid-market firms intending to be slightly more active in bringing back office activities, as follows: internal business services (23%), procurement (21%), external customer facing business services (19%), manufacturing and production (19%), and product development/R&D (18%).  “,”sans-serif”;>

In addition, the research revealed that Greater London is the top destination for mid-market firms’ re-shoring efforts. Forty-one percent of mid-market firms who are considering relocating some of their business activity are based in London – and overall 35% of mid-market businesses anticipate this activity being directed to the Capital. Other regions most likely to ‘benefit’ from re-shoring are the South East (17%) the West Midlands, (13%) the North West, (11%) and Yorkshire & Humber (10%).”,”sans-serif”;>