Logistics UK report highlights economic benefit of logistics growth

A new report from trade association Logistics UK has highlighted the positive impact that growth in the industry can have on the country’s overall economic performance.

The report, which is being published ahead of the UK budget, shows that a 1% increase in logistics’ share of the economy could attract £30bn of foreign investment.

According to the new research, the logistics sector underpins £356bn of economic activity, 5.3m jobs and £65bn in tax revenues across the UK, as well as enabling more than £1trn of international trade every year.

Meanwhile, every £1 of economic activity directly generated by the logistics sector more than doubles its value to provide a further £1.04 across the wider economy.

“With the Budget imminent, my message to the Chancellor is that the logistics sector doubles your money,” said  Logistics UK chief executive Ben Fletcher. “With every £1 of economic activity generated by our sector delivering a further £1.04 through its supply chain and employee spending.

“When considered alongside the sector’s direct financial contribution, significant tax contributions and role as a major employer, it is clear that logistics is not simply a critical sector in its own right, but an enabler of prosperity across the whole economy.

“These findings demonstrate why supporting the conditions for logistics businesses to invest, grow and operate efficiently should be a top priority for the government as it seeks to boost growth in every postcode.”

The report UK logistics: a critical driver of growth and investment also found that spending by logistics businesses with their UK suppliers supported over £90bn of gross added value (GVA) across the economy and 1.5m jobs in 2024.

“Five sectors – transport, administrative services, professional services, finance and manufacturing – experienced GVA boosts of over £10bn each due to this activity by logistics businesses,” Logistics UK said.

“The analysis also outlines how logistics sector employees generate economic activity from their personal spending with UK businesses: this ‘induced’ activity contributed an additional £90bn in GVA in 2024 and supported 1.1m jobs.”

The research, which was carried out by Capital Economics, also identifies a significant investment dividend from a strong logistics sector.

Alongside economic boosts from GVA, tax revenue and job creation, the new analysis quantifies the well-documented link between a thriving logistics sector and foreign direct investment (FDI), a key driver of productivity, innovation and economic growth.

“International companies invest in countries where goods move efficiently,” added Fletcher. “Reliable supply chains with good transport networks, warehousing capacity, ports and airports all reduce costs, increase profits and expand market access, and investors know that.

“To get growth going, we must ensure the logistics sector has the capacity, resilience and infrastructure needed to drive growth and attract investment from home and abroad.”