Is this the end of offshoring? 'No' says PA Consulting Group

It is thought Indesit's production will move from north Wales to Poland – where it already has operations – because of increasing costs and a continuing decline in the market. The company also has factories in Italy and Russia.

However, the practice of British and American manufacturers offshoring to cheaper locations in eastern Europe and Asia may start to turn around, according to research by the Financial Times.

The recession has started a decline in the number of companies considering relocation overseas, because of lack of investment and the shrinking cost advantages of moving to supposedly more affordable places.

Some industry observers say that the aim of governments in western Europe and the US to improve domestic production should be assisted by the growth of opportunities to achieve more efficient manufacturing at home.

PA manufacturing expert Tim Lawrence comments: "PA's experience is that offshoring manufacturing is not dead, however, the benefits case has become more complex.

"There is a minor trend to bring some work back in house from inflexible labour markets such as France and Germany, where it is too difficult and costly to lay off workers and where the utilisation of assets is low. But this will only be a temporary process as it fails to address the underlying cost and competitiveness advantages of low cost locations.

"The major trend is of companies accelerating outsourcing and off shoring to capitalise on growth markets in Russia, China and India – and so further reduce costs for their home markets. It will be the emerging economies that will lead us out of recession."

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