Transport & storage sector companies’ grim August – 31.5% report a slump in turnover
The latest government Business Insights report paints a gloomy picture of August’s trading. More than a quarter (27%) of all businesses revealed their turnover had decreased in August 2023 compared with the previous month – that’s 2% more businesses reporting a fall than in July. The home delivery expert ParcelHero says transport & storage sector companies were among the hardest hit. A sizeable 31.5% of companies in this sector saw their turnover fall against July’s results.
ParcelHero’s head of consumer research, David Jinks MILT, says: “This is a disappointing report for all logistics, delivery and supply chain companies that fall within the Office for National Statistics’ (ONS) transport & storage sector category. By comparison, their partners in both the ONS’ retail and manufacturing categories performed better. For example, 26.7% of manufacturing companies saw a decrease in turnover; 18.2% saw an actual rise, compared to just 12.9% of transport & storage sector firms.
“Looking ahead, there doesn’t seem to be much light at the end of the tunnel. According to these new government figures, more transport & storage sector companies expect a fall in October’s turnover than predict a rise. 18.8% of transport & storage sector companies anticipate a fall in turnover in October and only 16.8% think there will be an increase.
“Again, when we compare that figure to their manufacturing partners, there’s a striking difference. Only 8.4% of manufacturers predict a fall in turnover this October, while 22.4% forecast an increase. Transport & storage companies’ retail partners are also more confident; while 12.9% forecast a decrease in October’s turnover, 21.3% expect a better performance.
“To continue the gloomy picture, businesses were asked to compare their August results with those of the same month last year. Notably, 17.5% of transport & storage sector companies said their performance had decreased compared to August 2022, and only 11.4% said their results had increased. In contrast, 19.6% of manufacturing companies reported an increase in performance over the same month last year.
“Finally, compared to retailers or manufacturers, fewer transport & storage businesses plan to raise their prices in October. Just 11% of transport sector firms said they plan to raise their prices next month, compared to 12.2% of manufacturers and a hefty 20.9% of retailers. This highlights the squeeze many logistics and delivery companies find themselves in currently, operating on wafer-thin margins with little room for price increases.
“The transport & storage sector incorporates several fast-changing, agile industries. Since the end of Covid lockdowns, some parts of the logistics and home delivery market have yo-yoed. Companies with aging infrastructure and a fixed cost base have struggled.”