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Re-shoring on The Rise

According to global real estate adviser Cushman & Wakefield, a rising number of global manufacturers are considering re-shoring or on-shoring plant and facilities in Europe as global operational costs rise.

While countries from Asia Pacific continue to dominate the top half of Cushman & Wakefield’s ‘Where in the World? Manufacturing Index 2015’, highlighting the importance of the region as a global manufacturing powerhouse, there remains some underlying volatility.

China, the world’s largest manufacturer by output is experiencing rising labour costs, reducing its cost competitiveness. This is not only increasing the attractiveness of lower cost regions of Malaysia and Vietnam but also strengthening the prospects for manufacturers considering relocating operations back to Europe.

Concerns surrounding supply-chain management, brand perception and where a product is produced have risen up the manufacturer’s agenda. This is adding to the attraction of locating operations in home markets.

Certain European locations have climbed up the index as a result. Turkey is leading the way and has jumped three positions to 8th in the main index, while Poland and the Netherlands have followed suit landing in the 12th and 17th positions respectively.  The UK now occupies 15th place.

Simon O’Reilly, partner and head of account management for EMEA at Cushman & Wakefield, said: “From a European perspective, the outlook for manufacturing has certainly improved.  Rising global operating costs have reduced the cost competitiveness of some Asian locations and this is increasing the attraction of re-shoring operations for a number of manufacturers.  Turkey is well positioned to tap into a number of global markets while the UK is becoming more attractive to high-end manufacturers and remains a go to destination for R&D and innovation.”