Partner Article

UK now the cheapest place to manufacture in western Europe?

Rob Donaldson, head of Corporate Finance at Baker Tilly, looks at a report by the Boston Consulting Group (BCG) that suggests the UK is now the cheapest place to manufacture in western Europe.

I don’t think the findings of the report will come as any great surprise to UK manufacturers who have witnessed a shift in fortunes over the past five years. In particular, manufacturers that serve the domestic market are facing an alignment of positive forces.

Increased UK labour productivity, higher global shipping charges and inexorable wage increases in developing economies such as China are all factors in the renaissance of British manufacturing.

Where I see that the UK has developed a real global competitive advantage is in specialist manufacturing. The combination of some of the world’s finest educational institutions, a base of highly skilled engineers and hubs of creative design talent mean that the UK is leading the way in a number of fields including aerospace, defence and medical diagnostics. Our recent deal experience has shown strong private equity interest in this growing sector.

In addition overseas corporate buyers, from the US in particular, are freeing up their balance sheets for overseas acquisitive activity with UK assets being seen to represent good long term value. In short, I think that now is an excellent time for entrepreneurs in the manufacturing sector to be considering their long term strategic options.

This was posted in Bdaily's Members' News section by Baker Tilly .