Confidence in the Logistics sector on the rise despite staff and supply shortages - CILT(UK)
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Confidence in the Logistics sector on the rise despite staff and supply shortages

12 October 2021/Categories: CILT, Industry News, Logistics & Supply Chain


Despite well-documented staff and supply shortage issues, confidence in the UK logistics sector has risen to 62.5%, the highest level since H1 2015, according to the latest Barclays-BDO Logistics Confidence Index. 

 

This is in contrast to last year’s Index, when confidence fell to its lowest level since 2012 amid heightened Brexit and Covid uncertainty.  

 

However, the strength of the recovery and optimism about the future reflects the improved clarity and visibility around navigating Brexit and Covid when compared to last year, allowing operators to make future investment plans.

 

Operators still face significant business challenges, with 96% pointing to staff shortages as their main concern and many are worried about the increased labour costs this will cause.  

 

However, the industry is addressing issues head on with 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. 

 

The outlook for profitability is similarly optimistic, with almost two thirds (62%) of companies expecting to increase profits, up 13% on 2020. Three fifths (58%) of respondents cite greater use of, or investment in, technology to boost profits.

 

Underlining this renewed confidence, the Barclays-BDO study reveals 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, reflecting expectations for continued consolidation within the sector, driven by operators seeking to achieve economies of scale and to expand service offerings in an extremely competitive marketplace.

 

The research, which takes into account the views of 100 leading logistics businesses, also shows that many operators feel the acceleration in e-commerce is creating new opportunities, while those serving hospitality and leisure firms are seeing their markets revive.

 

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.”

 

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