There's was encouraging little article in the Telegraph recently by Rachel Bridge on the slow return of some manufacturing to the UK. We learn that Robb Knight of Ecoegg has shifted all his production home, thanks to the fact that the difference in cost between here and China has "significantly narrowed". It is still more expensive in the UK, but worth the cost for the upside -"control over quality".
Trunki the travelling parents' saviour has also moved home, from the Far East to Plymouth. Huge numbers of other companies (around 15% of British firms says the Engineering Employers Federation) have moved part of their production back to the UK.
There isn't much in the way of absolute numbers here and we have to assume that the total value is still relatively low but the good news for SMEs looking to reshore', says Bridge, is that "there is still much manufacturing expertise in the UK" with "regional clusters" of expertise emerging in areas such as Warwickshire, where there are already "600 advanced manufacturing companies". This is pleasing stuff.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The good news on UK firms continued, albeit with a slightly different slant. Tim Steer, manager of the Artemis UK Growth Fund, picks up on a point we have been making here for a good few months now that the big global mega companies everyone wants to be invested in at the moment might not actually be the best places to be.
Over the last few years there has been a huge swing away by our institutional shareholders from UK equities into the big international names so much so that most now hold 30% in non UK names. That makes sense at first glance holding international equities gives you diversification and exposes you to currencies that aren't sterling (usually a good thing).
But, says Steer, it has been a lousy strategy since 2008, because the UK market is already highly diversified and global in itself. And for every global mega cap you can think of, there is generally a perfectly good and slightly overlooked UK equivalent. So for Apple, say ARM; for Inditex, say Next; for Porsche, say GKN; and so on. The result is that "A well informed stock-picking UK fund manager can very easily identify global trends and pick a UK stock that will capitalise" on them.
Steer has attempted to show this by picking a random group of global mega caps and then finding a basket of UK listed stocks following the same themes. Over the last five years the latter has risen by an average of 21% a year. The former is up 7% a year.
There is doubtless much to bicker about in the methodology. But nonetheless the point is made: whether firms are producing here or are just listed and based here, "made in Britain can still be best".
-
Trump picks Scott Bessent to lead Treasury: will he succeed?Hedge fund manager Scott Bessent is an odd pick for Donald Trump’s Treasury secretary, but he is seen as the more reasonable and pragmatic of the candidates
-
Can you afford to retire in 2025?From interest rates and inflation to tax changes, there are plenty of factors to consider if you plan to retire next year – here is how to prepare.
-
House prices to crash? Your house may still be making you money, but not for much longerOpinion If you’re relying on your property to fund your pension, you may have to think again. But, says Merryn Somerset Webb, if house prices start to fall there may be a silver lining.
-
Prepare your portfolio for recessionOpinion A recession is looking increasingly likely. Add in a bear market and soaring inflation, and things are going to get very complicated for investors, says Merryn Somerset Webb.
-
Investing for income? Here are six investment trusts to buy nowOpinion For many savers and investors, income is getting hard to find. But it's not impossible to find, says Merryn Somerset Webb. Here, she picks six investment trusts that are currently yielding more than 4%.
-
Stories are great – but investors should stick to realityOpinion Everybody loves a story – and investors are no exception. But it’s easy to get carried away, says Merryn Somerset Webb, and forget the underlying truth of the market.
-
Everything is collapsing at once – here’s what to do about itOpinion Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect their wealth.
-
Value is starting to emerge in the marketsOpinion If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy traditionally expensive growth stocks on the cheap, too.
-
ESG investing could end up being a classic mistakeOpinion ESG investing has been embraced with enormous speed and zeal. But think long and hard before buying in, says Merryn Somerset Webb.
-
UK house prices will fall – but not for a few yearsOpinion UK house prices look out of reach for many. But the truth is that British property is surprisingly affordable, says Merryn Somerset Webb. Prices will fall at some point – but not yet.
