Industrial space in Europe is at a premium as global tensions accelerate a ‘near-shoring’ trend for manufacturers.
Companies bought or leased 29% more space in Europe last year compared to the year prior. And it seems there’s a mix of factors at play:
- 🚀 Online shopping has driven demand for logistics space
- 🦾 Automation is cutting some operating costs in Europe, and
- 💰 Governments are offering incentives to companies.
But Europe’s near-shoring journey is still rougher than a Ryanair red-eye:
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- 📈 Higher energy prices have left some activities non-viable
- 👷 Firms are struggling to find the right manufacturing skills, and
- ⚖️ The gains are uneven (central and eastern Europe benefit most)
Plus, a key Euro-area manufacturing index just hit its lowest point since 2020, suggesting there’s a lag between renting space and actually using it (not to mention a broader economic slowdown).
Intrigue’s take: The ‘shoring’ buzzwords have been crushing it lately: near-shoring, friend-shoring, right-shoring, re-shoring, on-shoring.
But they all basically point to the same thing: a spooked world securing supply chains and reducing its reliance on China. And yet, China is now exporting a trillion dollars more to the world in goods each year than before COVID.
So the world may need even more ‘shoring’. Or more time. Or both.
Also worth noting:
- A global manufacturing index has now signalled a drop in worldwide goods exports for eight straight months.
- France pitched a ‘Made in Europe’ industrial strategy to the European Commission earlier this year.
