Transport companies are slowing down. For the fourth consecutive quarter, the EFL Barometer sub-index recorded a value below the limited growth threshold, reaching 48 points in Q3, 1.3 points less than three months earlier. Only 9% of entrepreneurs expect an increase in orders, while nearly one in three respondents fears a decline. For comparison, in Q2 of this year, a similar percentage of respondents forecast an increase and a decrease in orders (29% and 26%). The war in Ukraine is a major concern for 66% of transport industry representatives. Consequently, only one in twenty respondents hopes for an improvement in the industry’s condition in the coming months.
EFL Barometer for the transport industry for Q3 2022:
- Sub-index: 48 points (-1.3 points q/q)
- Investments: 97.5 percent of entrepreneurs do not expect changes in investments
- Sales: 9 percent of entrepreneurs forecast an increase in sales; 31 percent forecast a decrease in sales
- Financial liquidity: 15 percent of entrepreneurs forecast an improvement in financial liquidity; 30 percent forecast a deterioration in financial liquidity
- External financing: 29 percent of entrepreneurs forecast a greater demand for external financing; 7.5 percent forecast a lower demand for external financing
- COVID-19 Barometer: only 5 percent of entrepreneurs expect an improvement in the industry’s condition within the next 6 months, 42.5 percent fear its deterioration
The EFL Barometer sub-index for the transport industry for Q3 of this year was 48 points, 1.3 points less than in the second quarter of this year. For the third time in a row, the indicator value did not exceed the limited growth threshold of 50 points, which means a return to the difficult situation of the pandemic years 2020 and 2021 (first months).
The President of the Management Board of EFL points out that the braking of the transport industry is reflected in the results of the leasing industry. – In 2021, heavy vehicle leasing recorded a growth rate almost one-third higher than in the first pandemic year. In the first quarter of this year, the growth was still maintained, but only at a 4% level, while we ended the first half of the year at a 3% year-on-year decline. Unfortunately, we do not expect the second part of the year to bring a rebound. And since investments are one of the first “swallows of the coming spring,” and there are almost none in the plans of transport companies, we must arm ourselves with patience before transport accelerates – says Radosław Woźniak, President of the Management Board of EFL.
War is an increasing drag
Quarter by quarter, transport is increasingly feeling the stronger impact of the war in Ukraine than the pandemic. 66% of companies believe that what is happening beyond our eastern border has an adverse effect on their operations (of which 28.8% – very adverse and the same – 37.5% – rather adverse). It is worth emphasizing that the percentage of respondents assessing that the war has a definitely negative impact on their operations is one of the highest among all 6 surveyed industries. Only in trade are there more pessimists (66.6%).
In the case of COVID-19 – 32.5% of respondents point to its negative impact (of which 10% – definitely negative, and 22.5% – rather negative).
Investments will not start, and liquidity is increasingly lower
Investments have been at a standstill for another quarter. In Q3 of this year, almost all transport companies (97.5%) plan a similar level of investment as in previous months.
Compared to the previous quarter, more industry representatives are worried about the sales of their services. Only 9% count on an increase in orders, and 31% expect a decrease. More than half expect a similar level to three months earlier. For comparison, in Q2 of this year, more than three times as many transport companies (29%) counted on more orders, 41% expected a similar level to the previous quarter, and 26% feared a decline.
And quarter by quarter, the financial liquidity of transport companies is deteriorating. Almost one in three already fears its deterioration in Q3 of this year (30%), while a quarter earlier this percentage was 24%. Only 9% count on its improvement, while a quarter earlier it was 15%.
The value of the main EFL Barometer index for Q3 2022 was 47.6 points. The achieved level is 1.1 points lower than in Q2 2022.
The EFL Barometer is a synthetic indicator informing about the propensity of SME sector companies to grow (i.e., development understood as setting goals related to sales and production growth, expansion into new markets, and profit maximization, which is associated with investments in fixed assets). The financial condition of SMEs forecast for a given quarter provides a reference point for inferring the assumed direction of changes that favor growth or act as a drag on company development. The study is prepared by Ecorys on behalf of Europejski Fundusz Leasingowy SA., and its results are published quarterly. Its participants are micro, small, and medium-sized companies from all over Poland. A representative group of 600 micro, small, and medium-sized companies took part in the study. The current edition of the study took place from June 28 to July 11, 2022.
Source: Europejski Fundusz Leasingowy