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Positive on growth

Positive on growth

Andrew Woodward, Investec’s head of Materials Handling, discusses the encouraging results of the bank’s recent survey of introducers.

If the business pages of the newspapers are to be believed it has been a gloomy start to the year, but prospects for the intralogistics sector look decidedly healthy. Volatile markets and political uncertainty may have grabbed the headlines, but here in the engine room of the economy – and what could give a better sense of how things are really going than the flow of material goods? – our introducers are generally optimistic about prospects for growth.

Last month, we surveyed materials handling dealers from across the UK, to take the temperature of the market and get a sense of how they expect it to progress over the year ahead.

The picture couldn’t be clearer: an overwhelming majority of more than 93% of introducers expect business sales volumes to increase over the next 12 months, with just over 6.3% predicting a decline. Breaking down the optimistic group, a significant proportion – just under 42% – believe that volumes will increase by 15% or more.

Turning to the funding market specifically, dealers are increasingly promoting finance to increase their customer truck sales. The number of dealers financing 61% to 80% of their sales has risen from 42.6% last year to 50% this year. These numbers are highly encouraging: it is clear that end customers are feeling confident about the economic climate and investing in their business for growth.

It is evident from our research that finance companies are integral to dealers’ operations as well as the warehouse and logistics industry. Asked for the top three factors governing where dealers decide to place their business, our respondents nominated the same top choices as last year: competitive funding rates; speed and consistency of funding decision; and quality of relationship with the funder. More than a third of respondents also nominated speed of payout and access to knowledgeable staff. We were very gratified to see Investec ranked top in our competitor survey on these variables.

At Investec, we are very conscious that technology and quoting tools are key to dealers, allowing them to speedily service their customers at point of sale. Our Materials Handling app enables our introducers to calculate rates, as well as stepped maintenance – providing them with the ability to structure deals to suit their customers’ needs. We were very pleased to see from the survey that 85% of respondents are already using the app – a number we hope to improve on in the year ahead.

Looking ahead, a number of dealers said they would like to see new products from funders, as well as an expansion in the range of funded assets. We were delighted to see an increase from 52% in 2015 to 80% in 2016, in the proportion of respondents for whom Investec is the most used funder. We trust this increase is a reflection of our service quality. With that in mind, we are actively considering how we can support the industry by adding to our product range.

As headline sponsor of IMHX in September, we hope to explore these topics in more depth at this event – I look forward to seeing and chatting with the dealer community there.  

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