Reshoring could create 200000 new jobs – Re:locate Magazine

The study said the trend to reshore jobs could result in a boost to GDP of between £6–£12 billion by the mid-2020s – an increase of between 0.4 and 0.8 per cent.

According to the study published on Monday, businesses need to take a fresh look at their location decisions in the light of the reshoring trend, which reflects a range of developments, not least the reduction of the wage gap with emerging economies such as China.

The quality of products, the long distances involved in out-sourcing to Asia and delivery factors have been other reasons cited by the increasing number of companies who have reshored recently.

John Hawksworth, chief economist at PwC, said, “This trend to reshore is still at a very early stage, but our analysis suggests that the impact on jobs and output could build up gradually to material levels over the next decade or so.

“Since the 1990s, there has been a major trend in the UK and other advanced economies for businesses to offshore activities to lower cost emerging economies.

“However, there are signs that the tide may be beginning to turn, with examples of reshoring back to the UK starting to crop up in a range of different industry sectors.”

In a separate report on Monday, the British Chambers of Commerce (BCC) upgraded its forecast for the UK economy, which it now believes will exceed its 2008 pre-recession peak by this summer.

A year ago, the BCC forecast that the economy would not return to such a level until 2016. However, with the economy now expected to grow by 2.8 per cent this year, the lobby group has dramatically revised its forecast.

John Longworth, BCC director general, said, “Our economic recovery is gaining momentum. Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition.”

However, Mr Longworth said it was “not time to break out the champagne”, particularly as business investment was likely to remain below pre-crisis levels for some time and because major problems remained, particularly the high level of youth unemployment and indifferent export performance.