Confidence in the logistics sector is on the rise despite pressing staff and supply shortages, according to the Barclays-BDO Logistics Confidence Index which shows optimism is at its highest levels since H1 2015.
The index has risen to 62.5, in contrast to last year’s Index when confidence fell to its lowest level since 2012 amid heightened Brexit and Covid uncertainty.
Improved clarity and visibility around navigating Brexit and Covid when compared to last year is part of the reason for the optimism, allowing operators to make future investment plans, the Index claims.
However, operators still face significant business challenges. 96% say that staff shortages is their main concern and many are worried about the increased labour costs this will cause. But companies are trying to tackle this challenge. 67% of companies saying they are investing more in recruitment or HR, and two-thirds (66%) are working with younger people or introducing apprenticeship schemes.
Although coming from a very low base last year, more than three quarters (76%) of operators expect their turnover to increase in the next 12 months and almost two-thirds (62%) expect to increase profits, up 13% on 2020. Three fifths (58%) of respondents cite greater use of, or investment in, technology to boost profits.
85% of companies are likely to make significant capital expenditure over the next 12 months, and almost two-thirds (63%) expect an increase in headcount within a year. Meanwhile, over two fifths (42%) of respondents say they are likely to make acquisitions over the next 12 months.
The research surveyed the views of 100 leading logistics businesses. James Lean, head of transport & logistics at Barclays Corporate Banking, said: “It’s encouraging to see confidence across the industry return after such a turbulent period. Having dealt with the challenges posed by the pandemic, the industry is feeling more confident about navigating through pressing headwinds around staff shortages. This is a highly resilient and innovative sector with increasing opportunities for growth and the future prospects for UK logistics appear to be looking up.”