20% more manufacturing heading offshore

Manufacturing News, Source : TheManufacturer.com
Published : 28 Nov 2005 15:51

A report ranking the UK as sixth among 25 world economies as the most competitive place in the world to do business, reckons it will slide to 12th if government and business don’t take action now.

And according to Trading Places, a new report from Deloitte, manufacturing business leaders were the most negative about the UK as a place to do business, with only 24 per cent of them believing that the UK is a good location for their operations.

Jane Lodge, head of manufacturing at Deloitte says: “The report suggests the environment for the manufacturing sector remains difficult and manufacturers need to be focusing on efficiencies to ensure that they can continue to compete on a world stage.”

According to the report manufacturing business leaders expect a further 20 per cent of UK production to relocate offshore - possibly in emerging economies including China - over the next five years.

“Clearly, UK manufacturers will need to consider the opportunities that emerging markets bring, as well as focus on what the UK does well. The UK Government has taken steps to improve access to skills and innovation for manufacturing businesses and as a result these are the two areas where respondents perceive improvement. However, UK regulation and the tax regime continue to concern the industry and are likely to be a disincentive for manufacturers to locate production facilities in the UK,” adds Lodge.

“The UK is at a critical point in its evolution as a centre for global business and its challenge is to turn accelerating globalisation into competitive advantage. In the UK between one fifth and one third of all functions are located abroad but this position will need to be kept under constant review in order to tap the global market. For its part, government must concentrate on further policy reforms to ensure they remain in line with the world’s best practices. A greater focus on R&D expenditure and smarter, rather than more, regulation should be a priority.”

The US is at the top of the league table with a strong performance across all sectors and a particular strength in Research & Development (3.2 per cent of its GDP is invested in R&D). Nordic countries Sweden, Finland and Denmark followed closely behind with strength in innovation and investment, while Germany was placed fifth in the ranking owing to its strong innovation base, enterprise and investment environment.

In emerging countries, South Korea is the front runner ranked at 13, followed by India at 22 and China at 24. These countries are all expected to climb the ladder creating a tougher trading environment for continental Europe.

Comments on this story

click here to add a comment