A recent study by The Boston Consulting Group revealed that the UK is now the cheapest place to manufacture in Western Europe.

This suggests the phenomenon of ‘reshoring’ – where manufacturers move their operations back from emerging market economies – has further to go, Brewin Dolphin said.

“While the UK is still suffering a gaping trade deficit in goods and services, this masks a renaissance of sorts in the British manufacturing industry,” said Guy Foster, head of research at the firm.

“From the ashes of the dirty industry of the 1970s has risen a streamlined manufacturing sector specialising in technology, aerospace, energy and pharmaceuticals. Britain holds a competitive edge when it comes to producing high quality capital intensive goods.”

Foster said investors should look to success stories such as Rolls Royce.

“British engineering doesn’t come with higher pedigree than Rolls Royce which still has half its workforce in the UK,” he said.

The company currently yields 2.65 per cent and is expected to continue to grow dividends by more than 10 per cent a year.

Over the last few years, it has strengthened its global market share, rationalised its supplier base and expanded the scope of its business. It has also reduced its financial risk through R&D sharing agreements and multi-year service contracts, Foster said.

He also cites aerospace and automotive components maker, GKN; Berkshire-based Morgan Advanced Materials, which is working on the Bloodhound Supersonic Car team’s attempt to break the world land speed record; and Renishaw, which has just been awarded a Queen’s Prize for Innovation for its ground-breaking microscope technology.