18th Mar 2026
If anything, these last few weeks have demonstrated how fragile our UK economy is and how reliant we are on imported energy as the debate rages on whether we should be using local carbon resource (North Sea oil & gas & fracking) to help self-reliance…
With an on-going global allocation of memory driven by AI & Datacentres, pressure is now being applied on oil through the Iran war. Increased ‘Shipping costs will almost certainly cascade down to all material transiting the route through the ‘Strait of Hormuz’.
With the Middle East conflict looking to remain volatile for the short term at least, we are about to see multiple pressures being applied to the cost of living & businesses alike. Fuel, food, energy, you name it… even your summer holidays will be affected with Inflation set to rise.
An already weak growth curve in UK manufacturing will be stressed further with inflationary pressure, businesses who are energy intensive in their manufacturing, will be hard pushed not to pass on any increase, PCBA assembly is energy intensive, and electricity has become an ever-increasing proportion of the over-head rate for EMS companies.
Previously, component allocation was not unusual and is circular in electronics with energy taken as a given…. But now its electric being the new kid on the block looking to make its presence felt across every facet of life with its availability, its cost & how its generated in the future and the effect it has on our planet.
As for UK electronics, we’ve been here before with component issues…. many times, the last being the Covid allocation back in 2020, but is this time different…. We like to think UK manufacturing resilience remains strong, with spending planned across many military platforms & infrastructure projects, which intern benefit the UK’s electronics sector….
But is this enough? If the UK’s energy cost remains uncompetitive and the mix of supply (renewable & carbon) can’t agree on what’s best for consumer & business, how can we agree on the balance of going green without damaging the UK industry. However, its obvious there’s an upside if we can agree & secure energy that is competitive again.
Question. Will the Iran war and oil supply focus minds on whether to re-shore manufacturing…?
The world as we know it appears to be changing with a move away from globalism. We also know OEM’s need to know they have control of their own destiny…whereas situational change seems to be happening without warning…surely now, consideration to manufacture back in the UK would be a smart move….if only to mitigate against any possible escalation.
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