Why nearshoring is back on the agenda
More manufacturers in Europe are moving production closer to home. Not because they are forced to, but because the economics of control are starting to outweigh the economics of labour cost.
It is a shift worth examining closely.
Beyond labour cost: the real economics of control
For decades, offshoring was the default lever to reduce cost. But the biggest risks in modern manufacturing are rarely found on the balance sheet. They show up in coordination failures, quality escapes, and compressed lead times that leave no room for correction.
When product complexity increases and change cycles shorten, distance becomes a liability. A small misalignment in design or tolerances can delay delivery, trigger rework, or halt production entirely. And resolving it across time zones, languages, and supply chains takes far longer than it should.
That is why proximity is being reconsidered, not as a preference, but as a structural advantage.
Recent research by Capgemini (2025) shows that two thirds of manufacturers in Europe and North America have adopted a re-industrialisation or nearshoring strategy. The share of production planned to remain on-shore or near-shore across Europe is expected to rise from 63% today to 72% within three years. Control, quality, and resilience are now valued above marginal cost savings.
Why bringing production closer can pay off
1. Shorter feedback loops in engineering and production
Complex automation and assembly projects depend on close interaction between engineering and manufacturing. When design, tooling, and assembly happen within the same time zone, or under the same roof, misalignments surface earlier and get resolved faster.
This matters especially in high-specification industries such as energy systems, heavy machinery, and clean technology, where each design iteration has direct implications for tooling, validation, and compliance.
2. Higher consistency and fewer quality escapes
Local oversight enables faster testing, tighter alignment, and better traceability. For low-volume, high-variant products in particular, proximity directly improves yield and uptime.
As one Western European OEM in power systems noted after relocating its final assembly from Asia to the Netherlands: "We didn't gain margin, we gained control. And that saved us weeks of delay per project."
3. Flexible capacity without fixed overhead
Nearshoring does not require building your own facility. Many companies choose to work with manufacturing partners to scale production or launch new programmes without the capital burden of owning a complete line. This model is particularly relevant in early project phases, where flexibility and speed matter more than optimised cost per unit.
4. Cost efficiency through considered setup
Working locally does not have to mean paying more. For many programmes, combining in-house manufacturing and assembly with structured component sourcing makes it possible to reach cost levels that are competitive with offshore alternatives, without the coordination overhead or quality risk that often comes with them.
Automation, lean logistics, and established supplier networks are the enablers here, not geographical proximity alone.
What this means in practice
The manufacturers rethinking nearshoring are not doing so out of sentiment. They are responding to a clear pattern: the hidden costs of distance, in rework, delays, and loss of engineering control, often exceed the visible savings on labour.
For engineering-driven companies with complex products and tight delivery requirements, a reliable manufacturing partner nearby is not a premium. It is often the more pragmatic choice.
Curious whether nearshoring could make your production more reliable and scalable? Talk to our team. We'll explore the right balance between cost, control, and capacity for your next project.