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UK Manufacturing – A Viable Option?


factory general bwAt the recent edition of Fashion SVP our CEO Jenny Holloway (factory pictured right) stated in a seminar: “Please don’t tell me today that any of you think that the revolution, in regards to making in the UK, is a fallacy – because it isn’t! We are making up to 10,000 garments a week, we make them competitively, we make them beautifully and we do it so there is margins for both sides.”

This was followed up by the news that British footwear brand Clarks is set to create 80 jobs as it returns part of its manufacturing operation to the UK.

The new manufacturing unit is set to be opened in Clark’s Somerset headquarters, where it started 200 years ago, will produce the brands iconic Desert Boot.

Chief executive Mike Shearwood said: “We are delighted to be bringing shoe manufacturing back to the UK and creating a significant number of highly skilled jobs.”

“Clarks is changing and as a global business we need to innovate and respond to the changing global economic order – Clarks is thinking big and innovating to ensure we are fit for the future and at the forefront of shoemaking, whilst being able to adapt to an ever-changing world.”

Meanwhile, UK manufacturing is feeling the effects of structural shifts in world trade and is urging Government for guarantees on barrier free trade as part of any Brexit deal. The research published byEEF, the manufacturers’ organisation in a report ‘Global Trade – Run Aground or Structurally Sound’ argues that it will take more than demand growth to sustainably turn around the UK’s net trade position.

According to EEF, this means it is essential the UK government ensures a barrier-free access to the EU as part of any deal on Brexit, whilst working to secure further liberalisation in partnership with the rest of the world. In addition, EEF is calling for UK government export support to be included in the industrial strategy white paper.

Key Research findings:

+ The EU remains of overwhelming importance for manufacturers with proximity to market and tariff-free trade regarded as top advantages.

+ Firms don’t want to lose the advantages of low tariffs and efficient export procedures in our trade with the EU, cited by 47% and 42% of manufacturers respectively.

+ World trade volumes more than 20% below pre-crisis trend levels after nearly a decade. The UK is feeling it with average export growth in the post-crisis period around a quarter of that in the previous 12 years.

+ Industry has been at the sharp end of the structural shifts, particularly in emerging markets.

While there has been an upturn in British based manufacturing UK manufacturers are export intensive with a quarter of companies generating 50% or more of their turnover from overseas sales.

made in britainThe UK is not alone in this experience however. Trade volumes globally are more than 20% below their pre-crisis trend and have staged a much weaker recovery compared to past global downturns.

EEF’s survey of manufacturing exporters bears this out. One in six and one in seven companies exporting to China and India respectively have seen a rise in local government intervention to support businesses. Manufacturers also report a rise in tariff levels, especially to the United States and Brazil where one in ten companies have seen an increase in the past three years. Companies exporting to these markets have also seen an increase in domestic preference requirements.

At the moment weaker sterling and strengthening global markets are sustaining a pick-up in export sales for UK manufacturers who are also benefitting from frictionless access to EU and good growth dynamics in emerging markets.

Commenting, Lee Hopley, EEF Chief Economist said:

“Exports remain fundamental to the performance of UK industry and the economy overall. In recent years, however, the world economy has been transformed in the wake of the financial crisis. As a result, the pace of world trade has been held back not just by weak demand but by an increase in protectionism leaving manufacturers facing increasingly complex hurdles in overseas markets.”

“Given research points to challenges that will not simply dissipate with a stronger world economy, the message for both manufacturers and policy makers is that their response cannot be ‘business as usual’. Industrial strategy must create the competitive conditions for companies exporting from the UK, whilst ensuring tariff-free access to trade with our biggest and nearest market and helping deliver future trade liberalisation will be key to the UK’s future trading success.”

UK manufacturing, particularly in the garment and footwear sectors, is showing steady growth, however, as the EEF survey points out industry and government will need to have favourable export policies in place to ensure that growth remains on an upward curve over a crucial period of change.

Related articles:

The Made in Britain Cost Myth

The Next Fashion & Textile Hub: Leicester

Meet The Manufacturer – Increased Demand for British Made Products

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