10th December 2020

Logistics is key to economic recovery

The logistics sector is vital to enable the economy to rebuild itself in 2021 according to a report entitled The Increased Importance of Logistics During Covid-19 and Beyond commissioned by Tritax Symmetry and produced by planning and development consultancy Turley.

The sector which contributes £130 billion GVA each year to the UK economy and now employs over 1 million people has continued to generate significant economic benefits during Covid-19. In Q2 and Q3 this year alone, the sector:

– Generated £3.4 billion GVA and created £211 million fiscal benefits

– Supported 73,400 direct, indirect and induced jobs

– Paid £900 million direct wages to logistics employees annually

– Supported 29,700 jobs with transferable skills, enabling employees to move into the sector following job losses in retail.

The report highlighted that 2020 has seen logistics operations move into the spotlight driven by Covid-19 and the national lockdown. This accelerated existing trends in online ordering and saw delivery of a decade of forecast e-commerce growth during the first month of the national lockdown according to data from the Office for National Statistics. Between February 2020 and October 2020, on-line sales values grew from 19.6% of retail sales value to 28.5%. By the end of Q3 2020, the take up of 38.6 million sq ft had already surpassed previous annual take up records in the sector, with further activity still to come in Q4.

The report also highlights that for every new 1million sq ft of space delivered per annum, the following additional impacts are generated:

Construction Phase:

1,400 jobs in the construction sector and in other sectors across the wider economy

£98 million GVA boosting economic output and growing productivity

£25 million direct wages paid to construction employees

£5 million fiscal benefits generated through NI and PAYE.

Operational Phase:

– Supporting 2,400 direct, indirect and induced jobs in warehouse and delivery operations and in other sectors across the wider economy

£110 million GVA generated, boosting economic output and growing productivity

£37 million direct wages paid to logistics employees

£9 million fiscal benefits generated through business rates, NI and PAYE.

Commenting on the findings, Jonathan Dawes Planning Director at Tritax Symmetry said: “This report highlights the crucial role played by the logistics sector in underpinning the economy and our everyday lives – it is an essential part of the UK’s infrastructure.  If the Chancellor is serious in his pledge to make jobs his number one priority, then we need to maximise the opportunities afforded by the sector to deliver wider economic recovery.

“The Local Plan process is not flexible enough to respond to the unprecedented economic challenges we face. We need a top-down commitment to supporting growth, ensuring that the right amount of land comes forward in the right locations through the planning system to meet the identified demand, in order to sustain delivery of the substantial jobs and economic benefits outlined in the report. Across the UK, sites are already in short supply and although logistics schemes can be delivered very quickly, often within 14 months, the time taken during the planning process often exceeds delivery timescales.”

Richard Laming, Senior Director at Turley continued: “It is clear that logistics is a significant employer with one million employees now working in the sector in a diverse range of roles. The proportion of office-based and managerial jobs in the logistics sector has increased significantly over the last 15 years. With rising unemployment, particularly in retail and hospitality, the need for new employment opportunities such as those created by the logistics sector, has never been greater.”

“Logistics’ growth is, however, more than just about new buildings and jobs. The sector is also adopting more sustainable initiatives to meet low carbon targets with a number of Net Zero Carbon Ready developments set to come to market across the county. Building back a green and resilient recovery is key to achieving long-term sustainable and economic recovery.”

Tritax Symmetry is already leading the way with its commitment to build all new buildings to net zero carbon in construction.

Richard Laming, Senior Director at Turley, concluded:  “During Covid-19, logistics has kept the economy moving providing essentials such as food and medicine and also helping businesses to keep trading. It is uniquely placed to continue growing and deliver more jobs in 2021 and beyond making a significant contribution to the UK’s sustainable economic recovery.”

You can read the full report here.

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