Andrew Malcolm, chief executive officer, Malcolm Group
I don’t think we’re heading for a recession - I think we're already in it, or that’s the approach we’re taking at Malcolm. When you’re in transport, with lower margins than we should all be working for, you always have to work with a tight control on cost management / cash. As my late father always said, 'plan for the worst and you won’t be disappointed or surprised.' It seems that all we get nowadays is surprises.
Matthew Deer, group MD, Swain
All the data points to a recession. A lot of what we see at the moment is many British companies preparing for a recession this year as they face the double hit of slowing consumer demand and rapidly rising costs from inflation on their businesses.
People know it’s going to be tough this year. Some are trading down given all the price pressures. Our sector faces a challenging period ahead in the short term.
Kevin Buchanan, group chief executive, Pall-Ex
The current trends are very difficult to read and the underlying reasons for the downturn are not what you would say is 'normal' but yes, I believe that we are heading for a recession. There is no sign of the war in Ukraine ending any time soon, so we are going to see fuel prices and food costs high for the foreseeable.
We have a whole generation of people who have never know hardship or how to tighten their belts and do without. This combined with labour shortages makes it very difficult to keep wage inflation under control.
Bob Terris, chairman, Meachers
All the signs indicate that we will suffer a recession fairly soon. High inflation is reducing disposable income which will reduce spending on non-essential items.
The hospitality sector is already suffering as many outlets cannot fully open due to labour shortages. We have seen a fall in drinks distribution in the past month.
Any reductions in volumes will add pressure to hauliers struggling with all the additional costs and many small operators are calling it a day. This will increase the shortfall of sub-contractors, affecting the larger operators who rely on their support
I think we are in for a period of uncertainty.
Moreton Cullimore, MD, Cullimore Group
We can already see a small contraction as housing developers are holding on to their land banks. Due to spiralling costs, both in materials and all forms of energy, their margins have reduced beyond the level which they wish to tolerate. If only the haulage industry enjoyed the same margins.
Recession is being talked about here, there and everywhere and I think it’s irresponsible to push the narrative. Otherwise, just like in 2008 we will talk ourselves into a much deeper recession than we were ever on course for.
Ultimately, the immediate post-Covid ‘boom’ was only ever going to be short term and therefore some receding from that was inevitable. Whether or not a hard recession comes or not will depend on whether inflation continues to increase and people begin to speculate again. The industry needs to keep trading and making good sound financial judgements and remain hopeful that all these things begin to settle soon.
Lesley O’Brien, director, Freightlink Europe
At Freightlink Europe we have never been busier, our level of activity continues to grow and there is no feeling that a recession is nigh.
Of course the media is all doom and gloom, reporting ever-increasing costs, the war in Ukraine, rising Covid figures and we can sometimes talk ourselves into a recession. There is no dispute, however, that fuel costs, maintenance costs, finance, the cost of vehicles and global impacts such as the cost of moving containers around the world will cripple transport and logistics if not passed on and, as a result, will drive up inflation, reducing purchasing power for both individuals and companies.
The current turmoil in government only enhances the lack of consumer confidence. Let’s try to stay positive.
Charlie Shiels, chief executive officer, ArrowXL
It’s very difficult to predict a recession in such an uncertain and unprecedented market. Currently the UK has recorded two periods of economic growth, and as a company we are currently out-performing our forecast in terms of delivered volumes.
In 2022 our trading expectations were lower year-on-year. We thought delivery volumes would be impacted by the end-of-lockdown and strong economic headwinds, which has proved true. However, this has been offset with some strong contract wins.
More good news came with the warm weather, which has further bolstered our recent volumes as consumers have invested in garden, leisure and home products.
Our thoughts for the rest of the year are mixed. We’ve won some fantastic new accounts due to our continued focus on excellent customer service, but we believe consumers will continue to be mindful of spending with the cost of living increasing. We predict that Black Friday trading this year will not be a record year and will have added complexity as it overlaps with the FIFA World Cup.
In summary, we are expecting some continued strong economic challenges, but remain confident in our ability to win even more new business. It’s certainly a tough and unstable market. However, at ArrowXL many of us have experienced boom and bust economic cycles and understand what is required to survive the storm.