Reversing Britain jobs exodus will create opportunities for 315,000, says report

Returning manufacturing jobs back to Britain could add 24 billion U.S. dollars to the country's economy, the leading global accountancy firm EY said in a report Monday.

An exodus of manufacturing in the 80s and 90s saw thousands of jobs exported to other countries, as factories across Britain closed, with overseas factories taking over during an era known as offshoring.

In the report, Re-shoring - Time to Seize the Opportunity, the EY said up to 315,000 new jobs could be created if the trend is finally reversed.

The EY said the return is likely to be prompted by the rising production costs of labor, transport and regulatory costs overseas, pushing manufacturing back to Britain.

Britain's North West region, once celebrated as the 'engine room of England' will benefit more than any other part of Britain, standing to gain 46,200 new jobs adding 3.7 billion U.S. dollars to its regional GDP.

After the North West, the other regions of Britain's to benefit most from reshoring are the West and East Midlands, the South East England and Yorkshire and the Humber.

The EY's UK and Ireland managing partner Steve Wilkinson said: "Those businesses that do relocate to the UK will predominantly be capital intensive sectors such as aerospace, defense, automotive, petroleum products and clothing, serving the European market."

But reshoring to Britain faces challenges, with rivals such as Germany, France as well as a number of emerging Eastern European countries bidding to become key manufacturers for the European market.

The EY said in its report that to address the key concerns of businesses, the British government should focus on reducing labor costs and building up key skills, widen access to finance measures, support innovative business and reduce capital costs through tax breaks.

Interestingly the area of Britain likely to benefit from reshoring is London, said the EY, due to the higher costs of land and labor, seen as an obstacle from operating in the capital by most high-end manufacturers.

"But the UK's economy could rebalance towards the regions and diversify as regional investment grows and expands into sectors like automotive and aerospace.

Mark Gregory, EY's chief economist and author of the report, said: "By supporting those sectors which offer the greatest return from reshoring in terms of employment and GDP, the UK will have a far more balanced, healthy and robust economy where consumers, manufacturers, service businesses and other sectors are pulling in the same direction.

"This will lead to a more sustainable economy which is better able to weather future global shocks, helping set the UK on a path to where it is not only competing but winning in the race for global growth." Endit