Drives & Controls March 2022

n COMMENT THE UK’S RESHORING EFFORTS GO INTO REVERSE You might have thought the Covid pandemic and consequent supply chain problems would have given a much-needed boost to efforts to reshore manufacturing back from Asia to the UK. But, in fact, quite the opposite has happened. According a new analysis, the UK has become more reliant on imports from Asia over the past four years. In the third quarter of 2021, manufactured goods imported from low-cost countries in Asia represented 61% of the UK manufacturing sector’s gross output – compared to 43% in the first quarter of 2018. The figures come from the Industrial Policy Research Centre (IPRC) – a collaborative venture set up by the Manufacturing Technology Centre (MTC) and Loughborough University. The IPRC has established a“UK Reshoring Index”that analyses manufacturing output and import data from 14 Asian low-cost countries (LCCs), to track to what extent the UK is reshoring manufacturing back from Asia. The analysis shows that the UK’s manufacturing output has yet to recover to its 2018 levels. In the third quarter of 202, the figure was 3% lower than in Q1 of 2018. According to the IPRC, growth has been hampered by the pandemic. Tough lockdown measures forced many factories to close in March 2020, with many workers being placed on furlough – in April 2020 alone, the figure was 911,000. As a result, manufacturing output declined by a third during the first half of 2020. Output was hit again as new Covid variants arrived. During the spread of the Alpha variant towards the end of 2020, manufacturers reported high levels of worker absences. Output fell by more than 5% in Q1 of 2021 – the only quarterly decline since the start of the pandemic. To make up for this drop in output, the UK has become increasingly dependant on imports. This is reflected in the reshoring index, which rose from 44% to 64% during 2020. The IPRC data shows that imports from Asia have been“remarkably resilient”. From Q1 2018 to Q3 2021, the volume of imports from LCCs soared by 39%. For China alone, the figure was 67%. This held up during the pandemic, despite the shocks to global supply chains. While imports from Asian countries fell temporarily during the first year of the pandemic, volumes recovered faster than the UK’s manufacturing output did. According to Dr Clive Hickman, who chairs the IPRC as well as being CEO of the MTC, the UK is too reliant on imports from low-cost Asian economies.“We must lead a renaissance in UK manufacturing with a renewed focus on jobs, skills and resilience to encourage the reshoring of industry,”he argues. To do this, Hickman contends, we need a national manufacturing strategy to future-proof the sector.“Focusing on building stronger links between academia and industry, boosting devolved powers to create regional industrial strategies and providing a specific funding pot for net-zero manufacturing,”he believes,“will boost the UK’s industrial capabilities, improve productivity and deliver thousands of green jobs for the future.” As someone once said, we need to take back control. Tony Sacks, Editor