Confidence boost for logistics

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Business confidence in the logistics sector has risen 15 per cent in the first half of 2013 compared to the previous six months according to the bi-annual Logistics Confidence Index, commissioned by business and financial advisers Grant Thornton and Barclays.

The survey of 100 senior executives in the logistics sector 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.

Some 71 per cent of executives forecast revenue growth over the next 12 months and over 52 per cent anticipate an increase in profitability within the year.

This positive outlook is expected to drive capital expenditure in the sector, with 64 per cent 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 per cent expecting to increase employee numbers within the next six months.

The survey found that margin pressure remain a concern in the sector, with a majority suggesting to this to be the greatest challenge currently facing the industry.

The onset of the Euro 6 regulations on diesel engine emissions is set to put a further strain operating costs, with most executives suggesting they’ll lead to higher maintenance costs and ultimately, higher fuel usage.

Philip Bird, director of corporate finance at Grant Thornton said: “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.”

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