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Transport firms plan to invest despite tough times

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Despite tough trading conditions and concern about margins, most haulage and logistics firms in the region are optimistic and nationally, are planning more investment and expect to report improved profits over the next six months according to new research.

A survey of UK logistics firms from Barclays and Grant Thornton shows 78 per cent found conditions were ‘very difficult’ or ‘somewhat difficult’ but 53 per cent expect an increase in profits over the next six months while 47 per cent expect to take on more employees.Pressure on margins is the biggest concern facing logistics businesses over the next six months, cited by one third of respondents, followed by fuel costs (20 per cent). Only 15 per cent of respondents were concerned by eurozone uncertainty. The survey says East Anglian logistics firms remain optimistic but a focus on cost-cutting and core business is restricting innovation. A new UK logistics confidence index shows that 63 per cent of UK businesses plan to invest over the next six months but they continue to tackle the same issues, rather than innovation.

Ian Carr, haulage and logistics specialist at Grant Thornton East Anglia, said “The ports of Felixstowe and others locally are reliant on the Chinese economy and its slowdown will bring greater pressure on the sector where margins are already thin. Overlay the European situation and the challenges are obvious but the fact that confidence still prevails shows the resilience of the industry and indicates a brighter picture for the future.” On capital expenditure 42 per cent of businesses surveyed said they were ‘likely’ to invest, while 21 per cent they were ‘very likely’ to expend capital.

At Norfolk based haulier Jack Richards & Son, which has a fleet of over 200 trucks and 350 trailers, managing director Peter Brown said: “We continue to invest in vehicles and our people, and would like to invest further; however, the only obstacle to this is the uncertainty that the Eurozone situation is placing on future borrowing costs.”

Almost a third of businesses (29 per cent) are likely to make acquisitions over the next six months, with nine per cent stating they are currently looking at an acquisition target and 20 per cent actively reviewing opportunities.

Matthew Peek, corporate director East Anglia at Barclays, said: “Whilst some of the region’s logistics companies recognise the need to innovate to survive, the day-to-day pressures make this difficult to achieve. However, it is pleasing to see an air of optimism in the industry."

Last Updated ( Friday, 10 August 2012 11:43 )