The UK is once again the cheapest place to produce goods in Western Europe, according to a new study by the Boston Consulting Group.

Direct manufacturing costs in the UK have improved by 10 percentage points compared to other Western European countries, due to stable wages and improved productivity over the past decade.

The study said that the UK may even begin to start competing with Eastern European countries like Poland and the Czech Republic, if the trend continues.

One reason for this is because wage costs have only increased by 16% over the past decade, compared to 52% in France and 62% in Italy over the same period.

Inflexible labour laws and lack of investment in tech and infrastructure has also hampered the competitiveness of other Western European countries.

Cheaper costs have reversed the trend for UK companies to outsource production, further strengthening the local manufacturing sector.

Sukan Ramachandran, a partner at the Boston Consulting Group, says this is part of a global trend.

He told The Telegraph:

“Perceptions are changing in the global industries. There is a growing realisation that, all other things being equal, it may be more effective to manufacture your goods close to your customers. That trend has been apparent in the US for about a year and a half and we’re now starting to see it in Europe too.”

Image courtesy of the U.S. Navy