UK third in Europe for low-cost parts

British manufacturing costs are among the lowest in Europe, an exclusive Engineer survey has revealed. The results show that relentless drives to cut costs have left the UK among the leanest manufacturers in Europe undercut only by Spain and Portugal. Component costs are highest in Germany and Austria, followed by Belgium, the Netherlands and Norway, […]

British manufacturing costs are among the lowest in Europe, an exclusive Engineer survey has revealed.

The results show that relentless drives to cut costs have left the UK among the leanest manufacturers in Europe undercut only by Spain and Portugal.

Component costs are highest in Germany and Austria, followed by Belgium, the Netherlands and Norway, which were consistently the most expensive countries.

Portugal was cheapest on both labour and overhead costs, with labour costs half those of its nearest rival, Spain.

In terms of total costs the UK was third cheapest, ahead of France and Italy, though it edged ahead of Spain in plastic parts.

The news comes as many UK suppliers are beginning to fear the greater price transparency that will be driven by the launch of the euro next January. Many believe that Europe-wide prices will be driven down as currency effects are stripped away, making possible a simple like-for-like price comparison.

Dr Ian Peters, deputy director general of the British Chambers of Commerce, said:’This survey shows there are clear opportunities for UK companies in Europe. We urge them to redouble their efforts to gear up for the euro’s launch.’

The survey was carried out for The Engineer by PS Industry Group, using its Kapes manufacturing cost planning software to compare the cost of producing six different varieties of component in 13 European countries. Kapes combines a database of official statistics and other published data with real-life engineering experience to deduce the most efficient way of making a component. It calculates a detailed costing for parts, operation by operation.

Materials costs, labour and overheads are included with an allowance for the supplier’s profit.

The components covered included: a pressed aluminium cover; a machined part; an injection moulding; a PC network card; and a steel Mig-welded component.

Countries covered were: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Portugal, Spain and Sweden.

Full details will be published in The Engineer next week.