Confidence among logistics operators has surged in the last six months with nearly 85% expecting their turnover to increase during 2014, a new survey has shown.

The UK Logistics Confidence Index, conducted twice a year by research agency Analytiqa for Grant Thornton and Barclays, suggests an overall confidence index of 74.9 among over 100 senior logistics managers at the end of last year, almost 25% up on the figure six months earlier and up 43% on those a year ago.

While the sector is still grappling with challenges including poor margins, driver shortages, fuel costs and market volatility, said the report, over 60% of those surveyed said operating conditions had been more favourable in the second half of 2013, with 55% expecting further improvements in operating conditions in 2014.

Three-quarters of logistics businesses are planning to undertake significant capital expenditure in fleets, infrastructure and technology, indicated the survey. A quarter of businesses are assessing acquisition opportunities, it added, while around 50% of operators are planning to increase their staff levels this year.

Rob Riddleston, head of transport and logistics at Barclays, said the marked rise in confidence was an encouraging sign for the UK economy. “However, while confidence has improved, this is only the start of an upturn in the sector where challenges remain and margins continue to bite,” he warned.

Darren Bear, corporate finance partner at Grant Thornton, said that although many operators had entered 2014 with confidence that the wider economic revival would continue to drive demand for logistics services, high competition levels were still a particular concern.

“Operators would be wise to keep an eye on value-add opportunities which ingrain them deeper into supply chains and strengthen their roles as critical partners in clients' success," he said.

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