If all goes to plan, in May Britain will once again be a country that makes washing machines. In Italy or Germany, a domestically produced household appliance would not be news, but this is a small milestone for a nation that, until recently, told itself it didn’t make things any more.

When the first washing machine rolls off the production line at the Ebac factory in County Durham, it will be the first made in Britain since Hotpoint and Hoover – both under foreign ownership – closed plants at the height of the recession in 2009.

Pamela Petty, Ebac’s managing director, says she was astounded to learn the UK had stopped making washing machines. “They didn’t go because we can’t make them or can’t afford to make them; they went because it suited businesses that were in white goods to consolidate factories. It just seems more straightforward and obvious to me that if we invested in more factories to make more of the things that we import and use every day the economy would be a much stronger place.”

“We don’t want to stop at washing machines,” she adds, standing near rows of gleaming stainless-steel drums, which in a matter of months could be filled with smelly socks and crumpled shirts. “My dream is that we become a household appliances brand.”

The Ebac story began in 1974 when Petty’s father began making industrial dehumidifiers in his garage. Now the firm employs 200 people making products for export all over Europe. Since 2011, Ebac has been owned by a trust, meaning all profits are reinvested and the company cannot be sold or broken up for private gain.

The company is aiming to make between 50,000 and 100,000 washing machines in its first year of production and hopes to double the workforce within three years. Even if Ebac reaches the high end of Petty’s ambitions – selling 300,000 washing machines a year, 10% of the UK market – she thinks it would still be “embarrassing” for the UK to be making so few of these everyday white goods.

Nevertheless, Ebac is taking its place in George Osborne’s “march of the makers” – the manufacturers he tasked with leading the recovery and rebalancing the economy away from the financial wheeler-dealing that plunged the UK into the biggest recession since the 1930s.

British industry was hard hit by that recession. Nearly 400,000 jobs were lost, although the remaining firms have become better at making more with less. Manufacturing makes up 10% of the economy and employs 2.5 million people, making it a larger contributor to GDP than tech and creative companies.

Since the crash, British politicians have fallen in love with making things again. In the 2011 budget, when he first sent the makers off marching, Osborne declared that “made in Britain” and “invented in Britain” would drive the nation forward. But despite the fervour of the converted, it hasn’t quite worked out like that. British industry is picking up more orders and taking on staff, but manufacturing is 5.4% smaller than it was before the downturn. A week before Osborne unveils his pre-election budget, data showed that industrial output fell by 0.5% in January – a shock to analysts who had been counting on smoother growth.

“The terrain has been fairly rocky: it has not really been a consistent performance,” says Lee Hopley, chief economist at the manufacturers’ organisation EEF. “The depth of the decline in 2008-09 was much much more significant than we saw across the economy as a whole.”

Hopes of selling more British goods to emerging economies have been realised, at least not as fast as anyone would like. Despite strenuous diplomatic efforts to woo China, the UK exports slightly more to Belgium than the world’s second-largest economy. “Everyone wanted it [export growth to new markets] to happen faster than was realistic,” Hopley says.

This means the UK is still living beyond its means, buying more from the rest of the world than it sells. Britain has not run a trade surplus since 1983, when Margaret Thatcher was in Downing Street and Duran Duran were in the charts. The gap between the income the UK receives from the rest of the world and the money it spends ballooned to £77bn in 2013 – the largest-ever cash amount and a near-record proportion of GDP.

The government argues that economic woes in the eurozone – the UK’s main export markets – are cramping exporters’ room for growth.

Professor Karel Williams at Manchester Business School agrees that economic weakness in the eurozone has capped export success. But even in a counterfactual world where eurozone economies had been zipping along, he doesn’t think British manufacturing would be ready for soaraway growth. Reversing the “emaciated state of British manufacturing after 30 years of neglect and decline” is a far bigger job than can be done in one parliament.

It is a task they are embracing in Newton Aycliffe, home of the Ebac factory. Just south of the coal line, industry did not arrive in Newton Aycliffe until a munitions factory was opened during the second world war – the crumbling redbrick building still stands near gleaming white cubes of modern industry on the road to Darlington.

After the war, Newton Aycliffe became one of the country’s first new towns. William Beveridge took charge and moved into one of the new council houses – although the architect of the welfare state never felt at home in County Durham, according to historians. The fulcrum of the town was always the industrial estate, itself a micro-history of British industry: early tenants included long-lost names such as General Electric Company and Bakelite. In the 1990s Fujitsu opened a computer-chip plant which ran into trouble when prices crashed; Hitachi, a new arrival, is hoping for more success as it makes the next generation of high-speed trains.

Newton Aycliffe is counting on industry to make its fortune and the local council recently approved a plan to add 50 hectares to the industrial park. Despite the town’s industrial heritage, unemployment is 13.8%, well above the regional average (8%), which is in turn above the national average (5.7%).

“The Tory cuts have given a new sense of urgency to efforts to revitalise the economy,” says Labour councillor John Clare. A local historian, Clare is also a keen observer of the topsy-turvy changes in the fortunes of the town. Writing Newton Aycliffe’s history in 2008, he concluded that “our town stares with some trepidation into an uncertain future”. Today he would write a different ending. “We’re much more hopeful nowadays. I think we are now setting the pace in the way we always intended to.”

Just over an hour’s drive north is another hotspot of reinvention. Brian Palmer, the chief executive of Tharsus, based in Northumberland, tells how the recession forced him to change his business. Before the crash, Tharsus made metal boxes for illuminated adverts on the London Underground - “metal bashing, basically”. But orders vanished almost overnight when the economy nosedived in 2008, forcing a rethink.

Today the firm makes everything from glass bottle crushers (used in recycling) to electric-vehicle charging stations. Palmer thinks the future for British manufacturing lies in sophisticated products made to order. “The business we had in 2008-09 was a good business, but I think the business model we have developed since then has got far more potential for growth … If you want to rebalance you’ve got to jump onto the next technological change.”

Yet while his business is booming, he doesn’t see the trend mirrored across the economy. British industry in the north-east is too dependent on oil and gas and the automotive sector, he says. “Manufacturing has had a good run for the last four or five years but I don’t think there has been any structural or fundamental rebalancing.”

Williams of Manchester Business School also sees real rebalancing as elusive. “The statistics speak for themselves: we have had a consumption and housing boom, which wasn’t what was planned.” He argues that “a more sensible” industrial policy would focus on making things for the UK home market, especially in food production.

That certainly chimes with Petty at Ebac. When she first applied for a government grant to start the washing machine business, she was turned down – probably, she thinks, because the business plan stressed sales to UK consumers rather than exports. She stuck to her guns, arguing that replacing imports was just as important as increasing exports.

The funding was granted on a second attempt. “Why shouldn’t we make more of the things we use everyday, textiles and white goods?” she says. “Personally I think it is the only way out of the mess we are in.”