"Reshoring could create around 100-2oo,000 extra UK jobs over the next decade, and boost annual national output by around £6-12 billion"
Reshoring is picking up in some sectors of the economy driven by shifting consumer preferences, a reduction of the wage gap with emerging economies, volatile international transport costs and a desire by management to better control quality and supply chain risks.
In order of magnitude terms, we estimate that this trend could create around 100-200,000 extra UK jobs over the next decade, and boost annual national output by around £6-12 billion at today’s values (c.0.4-0.8% of GDP) by the mid-2020s.
Manufacturing could benefit significantly from this trend, with additional UK jobs being created in sectors ranging from textiles to electrical equipment and other machinery.
Reshoring is also expected to affect the services sector. Our analysis suggests that significant numbers of additional jobs could be created over the next decade in the research and development, back-office services and telecommunications sectors.
Policymakers can facilitate this trend towards reshoring by encouraging the formation of specialised clusters (along the lines of lines of East London Tech City), upgrading infrastructure to ensure it meets the needs of business, and ensuring that the UK maintains a competitive tax regime.