Saturday 14th Dec 2019 - Logistics Manager Magazine

Brexit hits confidence across logistics industry

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Fears over Brexit have hit confidence across the logistics industry, according to the latest survey by Barclays and BDO.

The Logistics Confidence Index fell almost three points between the second half of 2018 and the first half of 2019, and now stands at 49.7, the lowest level on record and indicating that overall the sector is more pessimistic than optimistic about the state of the market.

The fall is being driven by respondents reporting that current business conditions are more challenging than last year, with just 14 per cent claiming they are more favourable.

Brexit fears are a significant contributor to the fall in confidence. Respondents indicated that plans for the future are being delayed as a result of Brexit uncertainty, with almost half (47 per cent) making lower levels of investment or placing decisions on-hold due to Brexit-related issues since the 2016 referendum.

Most operators are taking steps to ensure they are prepared for a range of outcomes, with just 5 per cent saying they have taken no action in response to Brexit, down 10 per cent from the previous Barclays/BDO survey.

Despite an increase in demand for some operators as a result of their customers’ Brexit planning, the industry is clear in its opposition to a no-deal departure from the EU for the UK.

Businesses were asked whether they would see more or less business from customers in different parts of the world under a no-deal Brexit.

For EU customers, no-deal scored net -52 per cent, with +9 per cent under a deal.

For UK customers, a no-deal outcome was also considered to be less positive than a deal being achieved (+8 per cent and +31 per cent respectively).

Even for rest of the world customers it was +3 per cent for no-deal, versus +9 per cent with a deal.

Richard Smith, head of transport & logistics at Barclays Corporate Banking, said: “Our logistics operators are sending a clear message – a no-deal Brexit is going to hurt the industry and must be avoided. The business leaders we surveyed have combined revenues of £17.2bn, so the fall in confidence they are reporting should be taken seriously.

“We don’t need to panic – the industry is extremely resilient and the Index’s dip into negative territory is marginal and comes after a long run of optimistic results. Logistics providers are doing their bit by investing in new technology and sustainability projects, but are dependent on the external environment being trade friendly to help them achieve growth and make a positive contribution to the UK economy.”

Brexit is top cause of supply chain disruption