British manufacturers are winning back work from China, as customers find the cost of using Chinese producers higher than expected, the results poor and delivery times unreliable, according to research by the FT.

While many large multinational companies continue to move production offshore to the lower-cost Asian manufacturing centres, others prefer the shorter supply chain of UK-based suppliers.

Smaller customers buying components and products from China often find the lower prices quoted for manufacturing them is outweighed by additional costs for shipping and quality control issues that are expensive to resolve.

"The main problem is that companies do not compare like with like," says Julia Moore, chief executive of the Gauge and Toolmakers Association. "If they realised what the real costs were of manufacturing in China, they would certainly consider bringing the work back to the UK."

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The trend has affected a wide spectrum of manufacturers, including those making relatively simple products such as Castings, a West Midlands company. It casts and finishes iron components for vehicle manufacturers such as Toyota, Scania and Daf, which want parts for their vans and cars to be available for immediate assembly on a "just-in-time" basis.

"Toyota picks up deliveries every six hours," says David Gawthorpe, chief executive. "We did lose work to China, and we've seen the return of some of it - even very basic castings. We don't undercut on prices to win the work back either."

Hadleigh Castings in Suffolk lost two large customers for aluminium products to China, but they were back within 12 weeks, says Chris Warnes, commercial director. "There were two main reasons: late delivery times and the quality of the product compared with the UK.

"One of the companies needed batches of 150, and the Chinese manufacturer sent crates of 1,000 a time. They had to employ two people to sort through them to find 150 of acceptable quality, and scrap the rest."

Quality has been an issue for many UK companies that have chosen to make parts in Britain, including PAL International of Lutterworth which makes hygienic work clothing such as gloves, mobcaps and overshoes. When it wanted a smart, branded dispenser for its products, it thought of China but plumped for Agentdraw, a local plastic mouldings manufacturer that supplied the order faster and at a lower overall cost.

"We could probably have it made a lot cheaper in China," says Richard Brucciani, executive chairman. "But we couldn't guarantee the quality and it wasn't economic unless you could fill a container."

Pal does make other products in China, but Mr Brucciani says it can be a difficult business. "You need your managers in there, rather than simply sub-contracting the work through agents. We now have two executives in the region to manage the process."

Nor is China a cheap option any more, Mr Brucciani adds. "Costs are going up in China at a remarkable rate. I suspect it will not be the place it was for the manufacture of simple products."

John Dean, industrials analyst at Jefferies stockbroker, says the cost increases are a reflection of improving quality in Chinese manufacturing.

"Ten years ago the difference in cost was absolutely enormous, and that gap has shrunk. The cost of manufacturing in China is rising, and quite quickly."

But many of the 300 toolmaking companies that belong to Ms Moore's trade association find they are still winning back work for customers who find the materials used in China and the quality of workmanship unacceptable.