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Survey predicts greater spend from logistics sector
28 August 2013
Business advisory firm Grant Thornton has identified a significant increase in confidence in the UK's logistics sector.
The survey of over 100 senior executives found a more positive outlook in the first half of 2013, compared with the previous six months.
The bi-annual Logistics Confidence Index, commissioned by Grant Thornton UK and Barclays, showed an overall confidence reading of 60.3 for the first half of 2013 - a 15% rise on the previous six months.
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.
"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."
Philip Bird, Director, Corporate Finance at Grant Thornton UK LLP 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."
Exploring new sectors and service lines was noted as a core opportunity for the sector by respondents. Although around a quarter (24%) are actively reviewing or engaged in acquisition opportunities, respondents indicated less of a focus on consolidation and collaboration than in previous surveys. Rather, the focus on customer service and retention, with the aim of growing alongside clients as the economy recovers, is driving logisticians to introduce new value-added services to strengthen their market share.
Rob Riddleston, Head of Transport and Logistics at Barclays, added: "The Logistics sector has been through a difficult few years as economic conditions have been challenging, therefore it is pleasing to see that the industry is looking forward to improved prospects. The industry is now well placed to help the economy continue to grow as we enter recovery mode, and with a number looking to explore new sectors and services lines, there is realisation of a need to adapt and continually improve.”