Economy Contraction Makes Case for Investment

The latest figures from the Office for National Statistics show despite modest growth in the economy during the first quarter of 2026, the Middle East conflict has seen the economy contract by 0.1% in April. Commenting on the figures, Logistics UK Chief Executive Ben Fletcher is pressing for greater resilience to be built into the economy to ensure goods can keep moving during periods of volatility: "The Middle East conflict is a stark reminder that it is impossible to predict the future: our members are certain that building resilience into the economy is the only way to manage the impact of similar unforeseen events.

The increased business confidence we saw at the beginning of the year was beginning to deliver growth, yet the sudden economic volatility caused by the Middle East conflict effectively put a hand brake on this and April saw the economy contract by 0.1%. "Reports that the conflict could soon be over will be welcomed across the globe, but it will be months before supply chains are operating as they were pre-conflict, with vessels out of position and contracts on hold, as well as the rise in fuel prices. Cost pressures are still increasing which is why the postponement of the rise in fuel duty, a 12-month road tax holiday for HGVs and a reduction in the red diesel duty rate for rail freight announced last month remain significant decisions for the logistics sector and something which our members would like to see remain in place.

"These decisions show the government is listening to our industry's concerns but to continue to build resilience into the economy and bolster the increase in confidence that we saw at the beginning of the year, what the industry now needs is an urgent package of ongoing support. Additional measures on fuel duty - including scrapping plans to automatically uprate fuel duty by RPI; low carbon fuel; electricity costs and business rates are critical and will ensure businesses can invest for the future while keeping our hospitals stocked with medicines, our shops with food and our homes with access to the goods we rely on every day." Logistics UK is one of the UK's biggest business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods.

With decarbonisation, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc.

Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.

For more information about the organisation and its work, please visit logistics.org.uk

Transport & Logistics Magazine - Driving The Industry Forward