London - A quarter of medium-sized British firms are thinking about bringing some or all of their overseas operations back home within the next three years, research released on Monday showed.
The shift could create an extra 126 000 British jobs and help these middle-ranking firms drive annual profits up by 12%, the survey by GE Capital Bank and Warwick Business School said.
Bringing back operations currently located elsewhere in Europe would account for most of domestic job creation, with most of the rest coming from reducing operations in the Asia Pacific region.
The report said 73% of manufacturing jobs shifting back would be from downsized operations in Europe.
"Rising costs overseas are one key factor driving re-shoring," Warwick University's Stephen Roper said, adding that the primary force behind the drift back to Britain is the realisation that longer supply chains hinder productivity and competitiveness.
"It's these operational factors which are driving many re-shoring decisions," Roper said.
Asked to rate the relative importance of factors driving them to consider bringing operations back to Britain, respondents rated rising operational costs abroad fourth behind management and control issues, business culture issues and productivity.
The research amplifies a recent study by international business consultancy PwC that predicted re-shoring would create around 150 000 extra jobs in Britain over the next decade and boost annual national output by around £9bn.