Outlook good not for Ion
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GROWTH is on the cards for the haulage industry for the rest of the year — but it won't last long and there is unlikely to be scope for raising rates during 1979.
That is the mixed outlook for operators contained in an economic report published this week.
Demand is likely to rise with the growth in other parts of British industry, but vehicle sales are well up on last year and there is more capacity to cope with the extra demand.
Costs will continue to rise at the 1978 rates, but vehicle prices will rise on a scale higher than the rate of inflation — and there are likely to be rises in tax rates, especially for heavier vehicles.
The report says that any rise in taxes will be split between extra fuel taxes and heavier road fund licences and will be added to costs imposed with the introduction of EEC drivers' hours regulations.
Labour costs, as always, are seen as the most uncertain and are linked with the political uncertainties of a possible Spring election — but it is thought unlikely that there will be a pay explosion on the 1974 scale.
Distribution and parcels services are thought to be the most likely to benefit from the recovery of industrial growth — but in the long term, declining business is likely to push standards of service up.
Distribution could suffer from cost-conscious grocery distributors with the possibilities of supermarket price wars in the back of their minds, and there could be pressure on distributors' profit margins.
Growth in the heavy haulage sector is dependent on the increasing demand for machinery movements likely for the rest of 1978 but with a slowing rate of growth in 1979.
But the outlook for tank haulage is good. Imports and exports are growing fast and rising consumer spending increases the demand for chemicals.
General haulage, too, faces a winter of growth followed by a slower New Year as industries respond to Government policy — and the election date.