About a fifth of Yorkshire’s smaller manufacturers are looking to return production to the UK due to concerns about lead times and reliability from overseas suppliers, a new report reveals.

Findings from the Government-backed Manufacturing Advisory Service show that one in five firms are looking to improve delivery performance, along with 17 per cent wanting to reduce costs and 16 per cent concerned about quality.

The biggest barrier to bringing production back home remains the cost of labour, while more than ten per cent of SMEs are worried about skills shortages, the latest MAS business barometer shows.

David Caddle, MAS area director, said: “There is certainly a growing desire from our companies to bring production home, with 21 per cent of firms surveyed either actively planning or considering re-shoring, compared to just three per cent that have offshored in the last year.

“This marks a major change in approach from five years ago when the Far East and Eastern Europe seemed to be the destination of choice. Buyers have realised that there is more to the ‘landing’ price than meets the eye, with delays in logistics and issues around quality adding a whole layer of hidden costs.”

The Barometer, which featured responses from more than 60 regional SME manufacturers, revealed that 65 per cent had achieved increased sales over the past six months, with 78 per cent expecting to grow up to April 2014. Most companies were planning to take on new staff or retain their existing workforce.

David added: “We have seen a two-year high in the number of firms investing in new technologies and this tells us that manufacturers are not only optimistic about the next six months, but also have one eye on the longer-term picture.”

Expanding Skipton technology company Chelker was among those which reflected the positive regional outlook. Chelker, which specialises in automation, machinery and product design, has continued to secure new projects across a range of markets, including automotive, construction, defence and oil and gas.

Neil Kernot, managing director, said: “I started the company ten years ago and this is definitely our busiest period to date. In simple terms we act as the design department for our customers and are also able to manage the entire project.

“This turnkey approach has seen us grow by 50 per cent in the last year and we are investing in the business to keep up with demand. This will now focus on upgrading the CAD hardware and implementing additional training to keep our staff at the top of their game.”

Chelker, which has designed equipment, machinery and products for markets in Brazil, China, Europe and India, recently recruited two more graduate engineers, increasing its workforce to six.