Moderate Confidence, Tapering Rapidly

A new Global Logistics Business Confidence Index conducted in February 2009 shows most respondents describe the markets where they operate to be “moderate” to “strong.” That view changes looking out three months and even more at the 12-month mark.

UK-based Transport Intelligence announced the results of its first Global Logistics Business Confidence Index comprised of over 500 responses from logistics professionals around the world. The index, which will be examined monthly, is designed to provide an indication of the strength of the industry and a valuable tool in assessing when the industry will come out of recession, says Transport Intelligence.

Perhaps a little surprisingly, the Index showed respondents are still confident about the present state of the industry. The Index for industry confidence stands at 6.4. (Any result above 0 is positive, with a range from +100 to -100.)

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A new Global Logistics Business Confidence Index conducted in February 2009 shows most respondents describe the markets where they operate to be “moderate” to “strong.” That view changes looking out three months and even more at the 12-month mark.

UK-based Transport Intelligence announced the results of its first Global Logistics Business Confidence Index comprised of over 500 responses from logistics professionals around the world. The index, which will be examined monthly, is designed to provide an indication of the strength of the industry and a valuable tool in assessing when the industry will come out of recession, says Transport Intelligence.

Perhaps a little surprisingly, the Index showed respondents are still confident about the present state of the industry. The Index for industry confidence stands at 6.4. (Any result above 0 is positive, with a range from +100 to -100.)

The short-term outlook showed a dramatic decline in confidence. Asked to describe their confidence in the economic prospects over the next three months, compared to the previous three months, the index falls into negative territory at -29.6. It then recovers slightly over a 12 month period, respondents overall believing there will be a small rebound in confidence to -26.5.

Drilling deeper into the results from a geographical perspective, China was rated by respondents as the strongest market with an index of 34.4. However, this confidence quickly drops away, with the three-month index falling to -28.1 and in 12 months it is down to -31.3.

Respondents responsible for logistics across the North American region had the least confidence about the market's present state, quantified in the -8.62 ranking. Respondents based in India were the most positive of all geographies about their market's prospects over both a three-month and 12-month timescale.

The most positive sector of the logistics industry was intermodal with a present confidence rating of 24.3. Unsurprisingly given the state of the markets, road freight/trucking and express were the least positive with other below average sectors being sea freight forwarding and shipping. All sectors fell into negative ratings over three months and 12 months.

The Index also looked at business confidence by industry vertical sector. The pharmaceutical/healthcare logistics sector was by far the most confident in the present market, offering a 38.9 rank, and reamined so over the coming year. The sector is often regarded as one of the most secular (i.e. least affected by cyclicality and volatility) due to consumers' on-going need for drugs and treatments and the large element of government purchasing involved.

The least confident industry sector at the moment is Industrial, struggling probably as a result of the decrease in investment in capital purchases and a reduction in construction/infrastructure projects.

Commenting on the results of the survey, John Manners-Bell, TI's Chief Executive, commented: "Our new Business Confidence Index shows that although there is a lot of negative sentiment in the market regarding its future prospects, on a global basis the industry is still just about keeping its head above water. Our survey has shown that some sectors are doing much better than others, such as intermodal and pharma logistics. Developing markets such as China and India are also still good places to be doing business. The Index will provide a monthly update on the state of the industry, allowing companies an insight into the markets, sectors and segments in which they operate."

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