23008_Nearshoring Report

By choosing to seek new suppliers within the UK itself, British businesses are looking to mitigate supply challenges and also minimise additional costs and increased administration when importing goods from the EU. This represents opportunities for businesses looking to supply the UK to locate within the UK. Of the foreign direct investment projects recorded in the UK in 2021/2022, almost half were involved in manufacturing or engineering sectors. Cushman & Wakefield statistics have shown that take-up of logistics and industrial space by manufacturers in the UK more than doubled between 2016 and 2022.

Looking forward, sourcing goods from within the UK is likely to remain a key strategy for UK businesses seeking to mitigate the cost and complication factors brought by Brexit: in a 2023 survey by industry body MAKE UK, 40% of UK manufacturers said that they had increased their supply from the UK, and a similar number saying that they will do so in the coming year, driven particularly by risks to supply, costs of transport and quality issues.

UK BUSINESSES: MAIN DRIVERS OF BRINGING THE SUPPLIER BASE BACK HOME

UK LOGISTICS & INDUSTRIAL TAKE-UP* BY MANUFACTURING BUSINESSES

RISK OF SUPPLY / DISRUPTION TO BUSINESS OPERATIONS COST OF TRANSPORT

1.2

1.0

QUALITY CONTROL

MILLION SQM

MINIMISE EXPOSURE TO FOREIGN EXCHANGE

0.8

PANDEMIC-RELATED REASONS

POTENTIAL VERTICAL INTEGRATION

0.6

ENVIRONMENTAL REASONS

0.4

SOCIO-POLITICAL REASONS PRESSURE FROM THEIR OWN CUSTOMERS (ie OEMs TO HAVE SUPPLIERS CLOSER TO HOME)

0.2

OTHER

IP SECURITY

0.0

Q1 - Q4 2016

Q1 - Q4 2017

Q1 - Q4 2018

Q1 - Q4 2019

Q1 - Q4 2020

Q1 - Q4 2021

Q1 - Q4 2022

% OF RESPONDENTS 0 5 10 15 20 25 30 35 40 45

SOURCE: Cushman & Wakefield Research *rolling four-quarter total

SOURCE: Make UK/Infor, Global Supply Chains Survey 2023

115

116

C U S H M A N & WA K E F I E L D

I N D U S T R I A L E VO L U T I O N | N E A R S H O R I N G