Repatriation of
manufacturing in Europe
What we’ll cover
Are companies repatriating?
What is primarily driving this change?
What does all of this mean for Europe?
Re-shoring: real trend or hype?
The flow of offshoring and re-shoring
IS RE-SHORING NEXT?OFFSHORING
Is re-shoring a natural phase
of the cycle?
% manufacturing in GDP
in Western Europe
1850 19...
A lot of publicity…. but in facts?
Let’s take a step back …
… potentially a lot of room for
repatriation!
Over 60% have offshored more than 50%
of manufacturing!!
Extent of Offshorin...
Production vs. consumption centres:
but rebalancing is underway…
Consumption vs production markets
USA / Canada
19%
37%
We...
Repatriation still the exception…
17%
Yes, to my
domestic market
In the last five years, have you moved all or parts of yo...
…with no big changes in sight
11%
Yes
Are you considering repatriation in the next 3 years?
89%
No
Drivers of offshoring:
proximity matters as much as costs!
Offshoring main drivers
4%
46%
4%
Cost of labour
Other operatio...
Reasons for repatriation
Top three considerations; % of sample
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Proximity to key
mar...
Offshoring vs Re-shoring
Drivers of offshoring and re-shoring in our analysis…
Proximity
Labour Cost
Supply chain
TWO SIDE...
Offshoring + Re-shoring
= “Best-shoring”
IS RE-SHORING NEXT?OFFSHORING
% manufacturing in GDP
in Western Europe
1850 1950
...
Manufacturing in Western Europe:
the past and the future
Evolution of manufacturing output:
0
5
10
15
20
25
30
35
last 5 y...
Competitiveness:
Europe losing ground
Source: Deloitte, Manufacturing Competitiveness Index
Europe 2013 In five years
Germ...
“Hot spots” for manufacturing
Intentions regarding production capacity in the next three years
Increase in production capa...
Regional specialisation
Source: Top European Logistics Hubs, Colliers International
www.colliers.com/emea/logisticshubs
Ma...
The future of manufacturing
in Europe
+
+
+/-
+/-
TECHNOLOGIC INNOVATION INFRASTRUCTURE + LOGISTICS
IMPROVEMENTS
3D printi...
Dilbert’s Best-shoring plans
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Repatriation of manufacturing in europe

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  • We analysed manufacturers’ global locational strategies, particularly the new phenomenon of re-shoring, to predict the future of manufacturing in Europe67% of the companies surveyed come from Western Europe, 28% from North America75% have more than 2500 employeesThe Automotive sector is the most represented in our sample, followed by “Food & Beverage” and “Electronic & Electrical Equipment”
  • How to read the numbers:e.g. 52% of the sample plan to maintain production capacity stable in Western Europe
  • Transcript of "Repatriation of manufacturing in europe"

    1. 1. Repatriation of manufacturing in Europe
    2. 2. What we’ll cover Are companies repatriating? What is primarily driving this change? What does all of this mean for Europe?
    3. 3. Re-shoring: real trend or hype? The flow of offshoring and re-shoring
    4. 4. IS RE-SHORING NEXT?OFFSHORING Is re-shoring a natural phase of the cycle? % manufacturing in GDP in Western Europe 1850 1950 2000 Rising cost of labour Globalisation ?? DOMESTICALLY DRIVEN MANUFACTURING Industrialisation Economic & population growth
    5. 5. A lot of publicity…. but in facts? Let’s take a step back …
    6. 6. … potentially a lot of room for repatriation! Over 60% have offshored more than 50% of manufacturing!! Extent of Offshoring as % of manufacturing production 3% 7% 21% 7% 0%, all production is domestic 1-25% 26-50% 51-75% 76-99% 100%41% 21%
    7. 7. Production vs. consumption centres: but rebalancing is underway… Consumption vs production markets USA / Canada 19% 37% Western Europe 27% 47% EE + Turkey + Russia 12% 3% Asia 35% 10% Latin America 4% 0% Top manufacturing centre Top consumption market
    8. 8. Repatriation still the exception… 17% Yes, to my domestic market In the last five years, have you moved all or parts of your offshore manufacturing operations back to your domestic market or macro-region? 7% Yes, to my macro-region 76% No
    9. 9. …with no big changes in sight 11% Yes Are you considering repatriation in the next 3 years? 89% No
    10. 10. Drivers of offshoring: proximity matters as much as costs! Offshoring main drivers 4% 46% 4% Cost of labour Other operational costs Proximity to new consumer markets Government grants Proximity / availability of suppliers 35% 12%
    11. 11. Reasons for repatriation Top three considerations; % of sample 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Proximity to key markets Supply chain optimisation/ transport costs Erosion of cost arbitrage Shortage of required skills Cultural issues and management difficulties Reputation
    12. 12. Offshoring vs Re-shoring Drivers of offshoring and re-shoring in our analysis… Proximity Labour Cost Supply chain TWO SIDES OF THE SAME COIN? Offshoring Re-shoring 1 2 3 Proximity Supply chain Labour Cost 1 2 3
    13. 13. Offshoring + Re-shoring = “Best-shoring” IS RE-SHORING NEXT?OFFSHORING % manufacturing in GDP in Western Europe 1850 1950 B E S T S H O R I N G 2000 Rising cost of labour Globalisation DOMESTICALLY DRIVEN MANUFACTURING Industrialisation Economic & population growth
    14. 14. Manufacturing in Western Europe: the past and the future Evolution of manufacturing output: 0 5 10 15 20 25 30 35 last 5 years next three years % up down Only European companies All sample
    15. 15. Competitiveness: Europe losing ground Source: Deloitte, Manufacturing Competitiveness Index Europe 2013 In five years Germany 2 4 Poland 14 18 United Kingdom 15 19 Czech Republic 19 22 Netherlands 23 24 France 25 27 Belgium 27 30 Italy 32 34 Portugal 35 37
    16. 16. “Hot spots” for manufacturing Intentions regarding production capacity in the next three years Increase in production capacity Stable production capacity Decrease in production capacity USA / Canada 37% Western Europe 52% EE + Russia + Turkey 48% China 44% India 37% Japan 31% Latin America 30% Africa & Middle East 26% Rest of Asia 33%
    17. 17. Regional specialisation Source: Top European Logistics Hubs, Colliers International www.colliers.com/emea/logisticshubs Main advantage for each region
    18. 18. The future of manufacturing in Europe + + +/- +/- TECHNOLOGIC INNOVATION INFRASTRUCTURE + LOGISTICS IMPROVEMENTS 3D printing Deep sea water ports Cheaper robots and growing automation Railway connections
    19. 19. Dilbert’s Best-shoring plans
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