Transport and Logistics industry expecting Q3 Olympics boost

28/08/2012

Despite signs of slight growth within the transport and logistics industry during the second quarter of 2012, the growth remained weak and much lower than that predicted in the previous quarter’s QTAS report, according to the Freight Transport Association’s latest Quarterly Transport Activity Survey.

However, the survey respondents said they anticipated growth to be much stronger in the third quarter of 2012. This suggests that the London 2012 Olympics will provide a genuine boost to the economy.

In addition, Freight Transport Association figures found that growth in domestic freight activity in the second quarter coincided with a fall in the number of road freight operators declaring insolvency in the quarter compared to the previous quarter.

Figures released by the Insolvency Service suggest that the number dropped by 22% in Q2 compared to Q1, and since the start of 2011 the longer term trend is also downwards and is now at an all time low.

Third quarter forecasts are much more optimistic with a considerable number of sectors expecting improved growth. The strongest levels of growth are expected in the wholesale and recycling and waste sectors.

Survey respondents identified that there was little growth in domestic road freight activity based outside of London and the South East in Q2, with most regions reporting activity at discrepancy with the levels anticipated in the April 2012 Quarterly Transport Activity Survey report.

The largest discrepancies were reported in the Midlands and the North where weak domestic road freight activity could be reported to manufacturing.

However, again the forecast for the third quarter in 2012 is more optimistic with only respondents in Wales and the South West expecting a fall in activity.

London and the South East consistently report growth that outperforms most other regions which can be accounted to the region being more reliant on the service sector rather than manufacturing, in addition to anticipated benefits from the Olympics.

Bruce Goodhart, Freight Transport Association Research Analyst, said,

“Hauliers continue to be squeezed by the effects of weak freight volumes as customers are affected by the slowdown in consumer demand. The mood of the country was lifted by Team GB’s success in the London 2012 Olympics and hopefully this will lead to an improvement in demand and the economy in the run up to Christmas.”

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