Confidence returns to UK’s logistics sector, survey says

A SURVEY of more than 100 senior executives in the UK’s logistics sector has identified a significant increase in confidence throughout the first half of 2013.

The bi-annual Logistics Confidence Index, commissioned by advisory and accountancy firm Grant Thornton and Barclays, showed an overall confidence reading of 60.3 for the first half of 2013 – a 15% rise on the previous six months.

The survey also points to a largely optimistic outlook for the remainder of the year, despite continued cost pressures and increased concerns over market volatility and legislative changes.  
 
Operators appear cautiously optimistic that business conditions will remain stable over the coming months, rather than deteriorate any further. More than a third (35%) of respondents expect business conditions to further improve throughout the latter half of this year. A majority (71%) of executives forecast revenue growth over the next 12 months and more than half (52%) anticipate an increase in profitability within the year.

This positive outlook is expected to drive capital expenditure in the sector, with nearly two-thirds (64%) of respondents looking to make a significant investment over the next six months. The optimism is also leading to stronger employment prospects in the sector, with 43% expecting to increase employee numbers within the next six months.

Geoff Davies, head of corporate finance at Grant Thornton UK, said: “The UK’s logistics sector is in many ways a barometer of the overall economy. The cautious optimism we’re seeing in the sector supports much of the more recent economic data that has been published.

“Logistics companies seem to be adopting a pragmatic and proactive approach to growth, as reflected in their capital expenditure and employee plans, and are now seeing the benefits of the leaner operating models that were adopted over the last few years in response to economic conditions.”