The UK economy is poised for a major £650 billion reindustrialisation push over the next three years, as global trade tensions and supply chain uncertainties prompt businesses to bring

operations closer to home.

According to a recent Capgemini survey of more than 1,400 executives from large organisations, a significant shift toward nearshoring and diversification is already underway. The move comes in response to growing concerns over potential new tariffs, geopolitical instability, climate risks, and global boycotts. The new estimate marks a sharp rise from the previous projection of £430 billion in 2024.

Over a quarter of UK executives reported that they are currently in the process of relocating supply chains closer to domestic operations—more than double the 13% recorded last year. However, this still trails behind the U.S., where 37% of firms are actively nearshoring.

The concept of “friendshoring”—sourcing goods from politically aligned countries—is also gaining traction. About 74% of UK companies now see it as increasingly vital, with projections suggesting it could account for 38% of manufacturing capacity by 2028.

Supply chain resilience emerged as the top driver for this shift, followed closely by geopolitical concerns and the strategic advantage of being closer to end customers.

Meanwhile, the global trade landscape is set for further upheaval as former U.S. President Donald Trump is expected to unveil new tariffs this week. These measures are likely to hit key UK sectors, including automotive and pharmaceuticals.

The U.S. remains the UK’s largest export destination, with £6.4 billion in vehicle exports and £8.8 billion in pharmaceuticals and related products shipped to the U.S. in 2024. In total, the U.S. accounts for just over 16% of all British exports.