Businesses are looking to reindustrialization for their next big investment

Britain will spend $640 billion in 2028 on reindustrialization efforts
US execs are more concerned about tariffs than their UK counterparts
Supply chain pressure and the desire to be closer to customers are also at play

UK businesses are preparing to invest in reindustrialization efforts over short-term growth as they look to diversify supply chains to mitigate the impact of the ongoing trade wars and tariffs, new research has claimed

As a result, Britain’s businesses are planning to invest $640 billion in reindustrialization by 2028, up from $430 billion in 2024, new findings from Capgemini report.

More than a quarter (28%) are also investing in nearshoring this year, up from 13% in 2024, though UK still lags behind the US, where 37% have invested in nearshoring.

Businesses are diversifying their investments

Capgemini notes supply chain resilience (97%), geopolitical concerns (94%) and the desire to be closer to customers (96%) as key drivers for the increased interest in reindustrialization – something that more than three in five (62%) execs are actively implemented.

Apart from the rise in execs citing supply chain pressure as a concern (95% compared with 69% last year), this was the first time that wanting to be closer to customers appeared as a major driver.

Furthermore, 48% of UK execs and 59% of US execs have accelerated their organization’s reindustrialization efforts as a result of ongoing tariff changes.

“Organizations are intensifying their efforts to de-risk and diversify their manufacturing and supply chains through friendshoring to reinforce proximity to markets,” said Aiman Ezzat, Chief Executive Officer at Capgemini.

The study found reindustrialization to be particularly notable within the battery/energy storage manufacturing, automotive and telecommunication industries.

Geographically, 82% of the execs surveyed by Capgemini revealed they plan to decrease their supply chain reliance on China – a significant increase over the 58% in 2024. Instead, they’re looking to target reindustrialization in North America, the UK, Mexico, Vietnam, India and North Africa.

“In an evolving global landscape, regional collaboration with suppliers, technology providers and policymakers will be key to build a resilient and adaptable manufacturing ecosystem,” Ezzat added.

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