Driver Require has recently released a detailed analysis of forecast data, interpreting the likely consequences for the UK economy and, more specifically, the impact on the UK’s haulage and logistics sector.
The analysis details that the current crisis is unique in that it stems from restrictions on both supply and demand, with pundits drawing similarities with economic conditions following WW2.
Driver Require CEO, Kieran Smith explains that “the forecast GDP drop for March 2020 is already worse than 2008 crisis and indications are that it will worsen until we are out of lockdown. Average forecast figures are -14% for Q2 2020 and -7% across the year, which is more rapid and severe than the 2008 decline of -6.3%.”
With no blueprint for managing a crisis like this, Smith’s analysis suggests that it may be that epidemiologists are better positioned to predict the economic outcomes than economists, saying “we are waging war on a microbe, a deadly virus, and our challenge is to prevent mass deaths while propping up the economy to make sure it survives the crisis. No-one has ever had to do this in modern times.”
Whilst Smith acknowledges that today, the health of citizens is the highest priority, he also explains that we are set to reach a point where social and economic consequences of a prolonged recession become the greatest concern.
“Ultimately, the longer the lockdown continues, the worse and longer the recession is likely to be; It is my belief that we will face a V-shaped partial recovery in late 2020 as we come out of full lockdown, followed by a U-shaped recession in the longer term. But this initial recovery will not be nearly enough to offset the massive drop in GDP in Q2, and GDP may not return to pre-pandemic levels until between 2023 and 2025.”
The Report goes on to interpret in detail the impact on hauliers and temporary recruitment agencies as we progress through the V-Shaped Phase and into longer-term recession.
This is intended as a roadmap for the UK Haulage Sector to use as it navigates its way through these difficult times.
Download all three sections of the report here.
