Do you have news? Tell us about it!

The transport and logistics industry will grow faster than GDP growth in Europe in the coming years. In the optimistic scenario, it will compensate for the pandemic drop as soon as next year, predicts PwC.

The transport and logistics industry is directly dependent on growth in the global economy. PwC forecasts two scenarios for the global economy in 2021-22.

The first, more optimistic scenario, assumes effective distribution of the vaccine and a significant decrease in COVID-19 cases. In this scenario, EU GDP growth would reach 5% this year and 3.7% in 2022.

The second, less optimistic scenario, assumes that the vaccine will not be as effective due to multiple mutations and imperfect distribution. Under these assumptions, growth is projected at 3.5% in 2021 and 2.6% the following year.

According to PwC, the Chinese economy will grow much more dynamically. Analysts estimate GDP growth in the Middle Kingdom in 2021 at up to 11% in the optimistic scenario or 4.2% in the second scenario.

As a reminder, the IMF forecast in October that the global economy would grow by 5.2% in 2021 after contracting by 4.4% last year. A more recent OECD forecast assumes more modest global growth of 4.2% in 2021 (and 3.6% for the euro area).

PwC’s forecast for the transport and logistics industry in 2021 varies depending on which GDP growth scenario comes true. In the forecast assuming a successful vaccine and well-functioning supply chains, the sector’s gross value added in Europe is expected to increase by 5.4% in 2021 and 4% in 2022. This would mean that transport and logistics companies would return to pre-pandemic levels by the end of next year (the decline in gross value added was 9% in 2020).

In the less optimistic GDP scenario, the growth of the transport sector would also be more modest. Nevertheless, similarly to the dynamic scenario, the growth in gross value added of the transport and logistics industry would be higher than the projected GDP growth, at 3.9% and 2.9% respectively in 2021-22.

Particularly important for the transport sector is the development of industry and the automotive sector, due to their use of global supply chains. In the optimistic scenario, PwC’s estimates assume an 8% increase in gross value added in the automotive sector and 4.6% in industry in general. This should have a positive impact on the transport and logistics industry.

An interesting trend for the future is the likely diversification of sourcing and supply to avoid the situation seen in spring 2020 when supplies from Asia were disrupted. This diversification of supply chains and the emergence of alternative routes create an opportunity for the logistics sector. However, the end of globalisation is not to be expected and many products will continue to flow to Europe from China and other emerging economies of the Asian ‘factory of the world’.

Photo credit @ Volvo Trucks


comments0 comments
In order to set notifications about comments - go to your profile