New businesses are on the up – there were 6,759 new companies in the sector compared with 5,537 in the second quarter of 2017, an increase of 22.1%. The number of active companies also increased, rising by more than a quarter to 130,977 over the same period.
In other positive news, companies bad debt (the volume of debt owed to the sector) dropped by 75.6% year-on-year, while suppliers bad debt (the volume owed by the sector) was also down by 70.0% from £34.8m to £10.4m. Over the same period, total sales increased by 1.5% to £204bn.
A mixed picture if presented when pitching the latest figures against Q1 2018. The transport sector showed small falls in total sales and the number of new companies between quarters. However, companies bad debt dropped by 36.0%, while suppliers bad debt reduced by half, when compared with the first three months of 2018.
Despite an increase in company failures of 32.8% compared to the second quarter of 2017, the transport sector has shown a real marked difference in the last three months with a 72.5% drop in failures from 574 businesses entering insolvency to 158 – a positive indicator for the industry.
Creditsafe’s Watchdog Report tracks quarterly economic developments across transport and 11 other sectors (Banking & Financial, Construction, Farming & Agriculture, Hospitality, IT, Manufacturing, Professional Services, Retail, Sports & Entertainment, Utilities, Wholesale).
Chris Robertson, UK CEO at Creditsafe, commented: “It’s encouraging to see positive numbers in the transport and logistics sector, and in particular, the substantial fall in company failures over the last three months. If the trends outlined in this quarter’s Watchdog Report continue, we could be looking at a healthier 2018 than we might have anticipated at the start of the year.
“However, ongoing Brexit uncertainty is still a worrying factor for the sector. We are still unsure on how the UK’s exit from the European Union will affect the free movement of goods, and how tax levies, fuel prices and other operating expenses will be impacted. Hopefully a clear picture is on the horizon, and in the meantime the industry should ensure preparations are in place to overcome any challenges resulting from a potential Brexit deal.”