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Confidence increases for transport industry (Part 1)

According to the Sensis Business Index for June 2016 confidence in the transport and storage sectors has increased. In this two-part series, we’re looking at the link between increased confidence in the transport industry and how that translates to economic growth, for the industry and for the economy at large.

The Sensis Business Index is a quarterly survey of Australia’s small and medium businesses (SMBs). The term ‘small business’ can sometimes be misleading. To qualify as a small or medium-sized business, annual turnover needs to be less than $2 million (small business) and generally, SMBs are defined as those that have between 100 – 1000 employees.

Positive signs as industry confidence rises

The quarter ending June 30 showed that confidence increased across the transport and storage sector by 18 points to +34 and while transport is still trailing the national average, people expect sales and profitability to increase.

At Drake Trailers, we’re very interested in the impact this confidence might have on trailer manufacturers in Australia. In the first of this two-part series, we’re going to look at how transport – and in particular heavy vehicle transport – is an indicator of economic growth and a critical sector of the economy in its own right.

The vital link between transport and the economy

There are four key reasons why the transport sector is seen as an indicator of economic growth:

  1. The number of commercial vehicles (in particular heavy haulage trailers and heavy transport trailers) physically on the road is an early indicator of goods being purchased – a clear sign of economic activity
  2. An increase in the number of vehicles on the road leads to the need for transport infrastructure – an activity that generates significant direct and indirect economic activity, jobs, ancillary services and engineering equipment that needs to be purchased and/or manufactured.
  3. Transportation industries – cover a huge spread of businesses, such as post and courier services, logistics providers, vehicle manufacturers, transport trailer manufacturers, fuel.suppliers, as well as all the related maintenance and services providers.
  4. Transport is a key enabler of international trade – unless goods and raw materials can reach ports cost effectively, there is no international trade. In Australia, our export hubs rely on road transport.

Benefits of being an established business

The June Sensis Business Index survey found that in the last quarter, the industry was confident in all five aspects that is uses to gauge behaviour:

  • Sales
  • Profitability
  • Wages
  • Prices
  • Employment.

The most confident businesses surveyed across Australia cited healthy sales and being well established in the market as crucial factors to keeping their heads above water. Those that had been around for longer, and had more time to establish a solid consumer base, were clearly going to be more positive than those attempting to only now get their foot in the door of this industry.

These findings certainly resonate with the team at Drake Trailers. We’ve been in business for nearly 60 years and during that time, we’ve experienced all phases of the economic cycle. The Drake Group now provides the largest range of Australian-made heavy equipment trailers in the marketplace.

Challenging business conditions mean that supplying a quality product that meets customer requirements, delivered with the very best customer service and support is more important than ever. These factors are key to our long history of success in the heavy transport trailer manufacturing business. If you’re looking for a heavy haulage trailer that is going to be with you for the long haul, contact us today.

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