IWLA Business Outlook Report

Chicago, Ill. — While the warehouse logistics industry is experiencing an uptick in business this year, uncertainty about the overall economy and world events has resulted in greater pessimism regarding the overall 2003 business climate.

Those results are according to the annual Business Outlook published by the IWLA. The report was unveiled on March 24 at IWLA's annual convention in Miami, Fla.

The IWLA study says that 66 percent of members report that their company is in a growth mode, and 60 percent intend to hire more employees in 2003. However, while 60 percent are either cautiously optimistic or very optimistic about the business climate for 2003, 40 percent are concerned or very concerned. Last year, only 29 percent were in that category.

"Clearly, business seems to have rebounded somewhat in 2003, but with the economy continuing to sputter, executives aren't ready to say that business has turned completely," says Joel Hoiland, president and CEO of the IWLA. "There still seems to be a fair amount of skepticism about what the future has in store."

The results were based on a 30-question survey sent to IWLA's 550 members in March. Aside from the positive results concerning business growth, the survey also reveals gains in space utilization for 2003. Just over half (51 percent) of respondents project using more space this year than in 2003. And while 35 percent projected using less space last year, only 15 percent fall into that category in 2003.

The other bright spot is that 43 percent of IWLA members say business is better this year as opposed to last year, while 26 percent say business is the same. However, nearly one-third (31 percent) claim business is off from las year. The results are marginally better than last year, when nearly half of respondents (46 percent) said business was down, with only 35 percent claiming an increase.

Increasing costs continue to be a concern, especially when it comes to insurance. Sixty percent of respondents expect health insurance costs to increase greatly, while another 37 percent expect slight increases. Almost all respondents (93 percent) also expect some sort of increase in property insurance. Members also anticipate costs hikes for utilities and transportation.

"We see some good trends, especially in the fact that so many of our members expect to hire more employees this year," says Hoiland. "That in itself is a good indicator of growth. We're excited that space utilization is heading in the right direction and that so many of our members project to be in a growth mode."

The study also shows that 36 percent of IWLA members are concerned with the financial status of their top 20 customers, and that 85 percent expect pressure from customers to reduce prices while increasing services. Sixty-five percent plan to purchase technology in 2003. Forty-one percent plan a major equipment purchase this year. Half of those respondents expect their capital expenditure to be less than $250,000.

IWLA, the outsourced logistics association, promotes the growth and success of 3PL companies by providing its members resources, information, education and professional programs designed to advance their business and provide greater value to their customers.

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