The trend towards value-sourcing is set to benefit the Midlands
economy, by encouraging more UK-based businesses to procure
products and services closer to home, according to
PricewaterhouseCoopers LLP (PwC).
The deterioration in the value of sterling since 2008 has
increased the cost of imports by as much as 30 per cent, according
to experts at PwC. This combined with the slow pace of the UK's
economic recovery compared to some other nations, is providing a
welcome boost for UK competitiveness, bringing benefits for
exporters and for those sourcing domestic products and
services.
Neil Philpott, private and family business expert at
PricewaterhouseCoopers, Midlands, said:
"The comparatively low value of sterling is tempting businesses
to consider sourcing their goods and services closer to home and
the relative drag of the UK's recovery means there is sufficient
capacity in the local economy to meet this demand.
"Midlands-based manufacturers and service providers stand to
benefit from the upturn in interest from the value-sourcing trend
because they can now compete on cost as well as quality and
service."
Sourcing goods from manufacturers and service providers in the
Midlands has always provided the benefits of excellent quality and
customer service - in particular, shorter lead times on contracts
and proximity to local markets. It also avoids exposure to shifts
in currency rates, providing greater certainty on costs.
The same factors also enhance the competitiveness of Midlands
companies looking to manufacture goods for export markets,
effectively reducing the costs of UK-manufactured products in
foreign markets.
Despite the increased competitiveness of Midlands-based
companies, anecdotal reports indicate that the specific interest
shown by UK-based businesses in restoring supplier contracts closer
to home has been minimal to date, but this could be about to
change.
Neil Philpott, private and family business expert at
PricewaterhouseCoopers, Midlands, concluded:
"Companies putting contracts out to tender have not been looking
closely enough, if at all, at the value offered by local
businesses. They can no longer afford to do this as many Midlands
companies can now deliver the right products and services at the
right price."