Manufacturers’ Brexit wariness offset by China’s economic woes, suggests global survey
26 Mar 2019
Despite concern over the effect of Brexit on supply chains, manufacturers have shown a growing preference for Europe over traditional low-cost sources such as China, says the latest Global Supply Chain Risk Report.
Published by Cranfield School of Management, the fourth quarter report for 2018 found that sourcing from ‘high risk’ countries has reduced by some 25%.
Dr Patrick McLaughlin, senior lecturer in manufacturing management at Cranfield, said the trend appeared to be largely affected by the situation within China: the UK manufacturing sector has a large amount of trade with the country, which has suffered a recent economic slowdown.
“More than in any other industry, the manufacturing sector has to go abroad to source suppliers. The UK supply chain is hollowed out. A lot of the manufacturing supply chain comes from the Asia-Pacific, and most of that is from China,” he explained.
Re-sourcing into Europe – even if the UK leaves the EU – may be seen as a safer bet than staying in China
Patrick McLaughlin, senior lecturer in manufacturing management, Cranfield School of Management
“Even though Brexit is dominating the European agenda, it is less of an issue for businesses that source globally, as they are already used to tariffs and customs clearances. Therefore, re-sourcing into Europe – even if the UK leaves the EU – may be seen as a safer bet than staying in China.”
Analysis in the report employed proprietary commercial data supplied by Dun & Bradstreet, including 200,000 transactions between anonymous European buying companies and their suppliers in more than 150 countries worldwide.
The Q4 2018 Global Supply Chain Risk Report is available here.
