As a refreshing change, Diesel News can report some optimistic forecasts for the year ahead with a survey from the Commonwealth Bank finding increased confidence about the future in transport and logistics companies.
According to the Commonwealth Bank Future Business Index, the transport sector is performing well and ready for any future fluctuations in the market. Signs of growth in retail, agriculture and mining recorded in the index are seen as good indicators for transport, on which these sectors depend. This positive analysis comes at the same time as more gloomy predictions for other sectors like property and construction.
“The Transport & Logistics industry is this quarter’s success story, bouncing back from more subdued readings over the last six months to lead the mid-market,” said Micael Cant, Executive General Manager Corporate Financial Services Commonwealth Bank, in the report. “Eighty-eight per cent of Transport & Logistics firms expect their business performance to improve in 2014.
“The performance of the Transport and Logistics industry is typically representative of broader economic conditions, so it is encouraging to see a dramatic increase in confidence among these businesses. Optimism across all businesses is being driven by a number of factors, most notably stronger revenue and profit expectations. Notwithstanding the buoyant sentiment across the mid-market, there remains a level of conservatism as businesses continue to focus on managing costs.”
The survey by the Commonwealth Bank of 422 financial decision makers in both public and private companies was carried out at the end of 2013. Companies surveyed range between $10 million and $100 million, in terms of turnover.
“Transport & Logistics was the standout performer this quarter, recording the highest Future Business Index reading of any industry,” said the Comm Bank report. “Buoyed by rising revenue and profit expectations and lower levels of concern about energy and fuel costs, the industry also stands out as the only industry group where over half say they are well prepared for future volatility.”
The index for transport and logistics moved from –8.4 in September to 38.7 by the end of the year. 57 per cent of businesses expressed the feeling they were well prepared. Regionally, the index rose most in New South Wales, with business expressing renewed confidence. Western Australia also lifted with a recovery in confidence, probably linked with increased activity in the mining sector.
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