Canada, Japan, Taiwan, Austria, and the UK are the best locations in the world for industrial occupiers looking to reorientate and ‘nearshore’ production in the face of ongoing economic and geopolitical uncertainty, according to Savills.
Savills 2026 Nearshoring Index, produced as part of its Impacts thought leadership programme, ranks 54 countries on the factors that are important to occupiers looking for new locations to shorten or diversify their supply chains and/or reduce their reliance on foreign imports. These factors include their resilience (local policies and proximity to consumers), economics (the cost of labour), business environment (the ease of doing business and trade infrastructure) and ESG performance (environmental/labour standards and energy performance). The Index is positively correlated with economic development – higher income economies generally score near the top.
In the Americas, both Canada and Mexico rank highly – with Canada topping the Index overall - partly due to their preferential access to the US market, especially in the face of uncertain trade tariffs.
In Europe, Austria ranks top, due to its central geographic position, highly skilled workforce and strong credentials across resilience and ESG metrics, followed by the UK and Portugal, with many other European economies also in the top 20. Savills says this is due to them providing a good balance across all four pillars, especially resilience as they have strong access to the EU - the largest single market in the world.
In APAC, a mix of high- and middle-income economies outperform including Japan, Vietnam and China – the latter confirming its continued strength as a global manufacturing superpower.
Connor Chilton, Associate in Savills World Research, comments: “In the current macro and geopolitical climate, location is an incredibly complex decision for global manufacturing firms. Decisions aren’t just driven by a desire to minimise costs, but major considerations such as resilience, energy security and policy environments, alongside labour availability, rents, and access to consumers. Many of these factors pull in opposite directions, so those locations that top our Nearshoring Index tend to be those that manage strike a balance between all these factors.”
Savills says that location is also critical from an inventory management perspective as many businesses continue to transition from ‘just-in-time’ supply chain strategies that prioritised cost to more resilient ‘just-in-case’ systems, which involve retaining larger inventories in storage closer to consumers. This practice has contributed to strong demand for warehousing space in recent years.