2014.11.0302:04:13UTC+00Reshoring of companies in eurozone rises despite economic downturn

A report has shown that eurozone companies have been reshoring more of their operations during the past year with a sizeable chunk intending to do so again in the near future.

Based on the research conducted by the management consultancy firm PwC, almost two thirds of the 384 companies in the eurozone, excluding those in the financial sector, reshored part of their activities in the past twelve months, led by production operations. Nearly half of those surveyed reported plans to do so again within the next year.

Of those who engaged in reshoring, companies based in Italy were in the lead with 44 of them having already brought back a portion of its operations to the country from overseas.  Businesses in Ireland came in second at 42, while Spanish and German firms came in next with 32 and 30, respectively.

Chief economist for PwC John Hawksworth attributed the trend to multiple factors including the narrowing wage gap between emerging markets such as China and the eurozone. He claimed that an increase in the costs for labor and transport contributed more to reshoring than fluctuations in exchange rates.

He added that, “European economies have seen some improvement in competitiveness but bigger changes are in the costs of potential suppliers in Asia.”

According to the report, 230 companies reshored their operations, particularly those for production, legal, information technology, and tax.