Whilst the survey, which is out today, was focussed on the future of offshoring and re-shoring trends, it’s become evident that these terms cannot fully explain multinationals’ movements around the world. “Companies’ strategies are far from being one-dimensional,” Guy Douetil, Managing Director of EMEA Corporate Solutions at Colliers International explains, “The good news for Europe is that it is set to increase its appeal as a ‘best-shoring’ option; poised to benefit from changes to rail and deep sea ports meaning it can reach a broad consumer markets in both Europe and Asia.”

Continues Guy Douetil: “The findings of the report have been surprising as the general perception, based on all the hype around offshoring and re-shoring, was that manufacturing businesses were flocking back Europe. It was commonly believed that multinationals were returning to their Europe, driven by a need for proximity to their client base, supplier chain and escalating labour costs in traditional offshoring locations like India and CEE.”

According to the Colliers and Corenet Global research, although nearly 25% of manufacturing businesses have moved parts of their production activities back to Europe in the last five years, this is rarely part of an explicit repatriation strategy. In fact, a tiny 11%, of manufacturing companies plan to return to Europe, or ‘re-shore’, in the next three years.

The research also shows that emerging markets will experience growth as their domestic economies and consumer bases grow, and that these countries remain the primary targets for manufacturing expansion. The survey shows that half of the participants intend to ramp up production in Eastern Europe, Russia or Turkey in the next three years, where the automotive and pharmaceutical sectors are expected to be a continuing driver of manufacturing growth - over half of companies belonging to this group intend to scale up operations in the region in the next three years.

The development and upgrading of deep-water ports in Southern Europe will enable these to accommodate larger ships and create competitive trade routes for goods shipped from Asia to Europe, especially those destined for Central and South Eastern Europe.

Guy Douetil says: “Movements between “low cost” countries, particularly from China to other emerging economies, are set to increase. The sharp rise of labour cost and consequent erosion of cost advantages in emerging economies is now a key concern for global businesses. In China, salaries more than doubled since 2007, and the introduction of mandatory employer social welfare contributions and rising wage expectations from employees is also likely to place total labour costs under further upward pressure.”

In the longer term, it is also believed that the supply chain will be radically transformed by innovations in technology such as 3D printing and robotics, allowing companies to locate their manufacturing facilities closer to consumers.

Douetil concluded: “While 3D printing is now in very early stages, it is developing quickly and will soon make it possible to manufacture complex solid objects and customise inputs as easily as standards parts. Component assembly will increasingly be handled by robots, making labour cost and regulation a less determining factor in locating factories and in sourcing decisions. These two forces are already at work and will increasingly undermine the business case for localising manufacturing away from buyer markets, and will prompt companies to bring production closer to consumers.”

You can download the report here.