Logistics and Supply Chain Confidence Index: Most companies expect their turnover to rise

Domestic demand continues to be strong; however, economic growth across European countries is slowing down gradually and, as expected by senior supply chain professionals, it will influence future export levels. Nevertheless, companies still see the potential for further growth. These are some of the findings from a new survey carried out by CBRE, the world’s leader in commercial real estate services, P3, the industrial developer, and Analytiqa, the logistics and supply chain research agency, and titled “Logistics & Supply Chain Confidence Index 2019/2020”, in which 50 key managers from logistics, production and retail companies in the Czech Republic participated. 43% of the companies interviewed expect higher profits in the year ahead and 59% of respondents expect their turnovers to increase. These conclusions are positive in spite of the fact that most companies expect more challenging conditions in the market during the next twelve months, which is reflected in the confidence index itself that is 43.3. This indicates a mood of caution among companies.

“Companies are approaching current market challenges proactively. Although they continue to carefully monitor their costs, they are also investing in new technologies and innovations to increase their productivity. They realise that putting in place effective processes can lead to long-term growth. Due to this, up to 57% of companies expect significant capital expenditures in the new year,” says Clare Sheils, Head of Industrial & Logistics, CBRE, and adds: “Almost three-quarters of respondents are planning to implement automated solutions or to begin with robotic automation in the next year, which will release approx. 9% of their employees during the next three years to reassign them to roles requiring higher skill levels and qualifications. A total of 64% of supply chain “decision makers” want to establish sustainable approaches in their work organisation (59% of them using cloud services) and almost one-half of respondents will implement so-called Big Data projects.”

The demand for industrial real estate will continue to rise. “A total of 61% of respondents from the logistics sector stated in the survey that they expect an increase in the demand for industrial parks during the next 12 months and 30% of respondents expect the same in the case of real estate intended for light industry production and retail warehouses. At the same time, it is more and more difficult to select a suitable location or, more precisely, companies encounter a lack of suitable land for construction. In addition to the locality, flexibility is then essential for our respondents – be it in terms of lease conditions or in terms of temporary storage areas,” states Tomáš Míček, Managing Director P3 for the Czech Republic.