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Business Sentiment Index - Transport and Haulage

The Close Brothers Asset Finance Business Sentiment Index (BSI) continues to track steadily upwards for the Transport and Haulage sector, even as the full impact and duration of the pandemic has become better understood.

Click here to view the BSI update in full size

The latest figures have been taken from our regular Business Barometer survey of 900 senior SME leaders, conducted as the second lockdown came into effect.

After falling sharply to 11.5 in April 2020 from 28.75 at the start of the year, the index rose modestly to 13.25, followed by a steady uptick to 17.5 in December 2020.

As the results suggest, the Transport and Haulage sector has been more resilient than most during the pandemic, with supermarkets and grocery suppliers operating at close to maximum capacity and demand for home deliveries at record levels.

The BSI is calculated and based on business owners’:

  • Appetite for investment in their business in the coming 12 months
  • Access to finance and whether they’ve missed a business opportunity due to a lack of available finance
  • Views about the UK’s economic outlook
  • Thoughts on their likely performance in the coming 12 months 

Appetite for investment

Firms’ willingness to invest nearly doubled, reaching levels last seen in 2018. The initial shock of the pandemic has dissipated and with government-backed schemes having been extended, business owners are becoming more bullish with their investment strategies.

Many have also diversified, finding opportunities that may not have been explored in the past.

One obstacle that may stand in the way of investment is some funders’ closing their books to new business

Missed opportunities

Nearly half (47%) of companies surveyed have missed a business opportunity due to a lack of available finance - despite the availability of CBILS (Coronavirus Business Interruption Loan Scheme) and Bounce Back loans.

Part of the reason for this is because many lenders are reluctant to accept new business because of provisions that need to be made for bad debt, making them less willing to be exposed to the risk of non-payment.  

Economic outlook

Positivity among Transport and Haulage firms about the macro economic outlook is at levels not seen before, and significantly higher than the UK average.

Company bosses are confident they will continue to be well placed to benefit from, for example, changing shopping habits, and haven’t allowed Brexit to dampen their confidence or enthusiasm.

Predicted business performance

In the main, Transport and Haulage SMEs are quite cautious about their own firm’s prospects, with the needle not moving much since April 2020.

Just under half expect performance to ‘stay the same’ in the coming 12 months while a quarter each will either ‘expand’ or ‘contract’.