Making reliable economic forecasts in times of Corona is almost impossible. The markets are currently far too volatile due to the lockdown and declines in orders, etc. Nevertheless – or rather because of this – the logistics experts have aimed to make a statement about the development of their industry for the year 2021. Through continuous online surveys and analyses at the summit meetings last spring and fall, the group of experts was able to make a preliminary assessment of the “state of logistics”. The logistics experts come to the following core findings.
Collapse of logistics performance in 2020
The figures currently available for 2020 lead the logistics experts to assume a slump in logistics performance of 5 percent in real terms and 6 percent in nominal terms. This would mean that the economic sector would fall back to the level of 2017. This decline is caused in particular by falling orders in the automotive and mechanical engineering sectors. Both these key industries already suffered declines in 2019. In contrast to the automotive industry, mechanical engineering was unable to recover by the end of 2020.
2022 back to normal
However, the expert group assumes that the level of 2019 will probably be reached again as early as 2022. To this end, the logistics experts draw comparisons with the financial crisis of 2009, which resulted in a greater slump – minus 8 percent in nominal terms – than the Corona crisis, and yet only two years later managed to surpass 2008, which was a good year for logistics. According to the logistics experts, this was thanks to the preceding global economic boom and generally higher growth rates in logistics (between 6 and 9 percent nominally compared with 2.5 to 4 percent nominally before Corona). Another difference to 2009, he said, was that all sectors of the economy were able to participate equally in the recovery at that time. However, not all companies would participate equally in this recovery. After all, entire sectors of the economy were not allowed to offer their services.
Nevertheless, the experts are more confident than last fall. According to their estimates, the pre-crisis level will be reached again in the second half of 2022. The positive development at the end of the year, particularly in the key industries of automotive and chemicals, gives cause for optimism. The relatively rapid introduction of vaccination should also give a boost to economic growth worldwide and to domestic demand in Germany. A pent-up demand is seen generally for private consumption and private investment in consumer goods in 2021, even if it will not be possible to compensate for the slumps in the segments particularly affected by the lockdown, according to the group of experts.
Logistics economy 2021
The logistics experts expect growth this year in almost all sectors of the economy. This was not so clear at the beginning of the corona crisis and even in the fall of 2020 due to a lack of vaccine and rising numbers of new cases. The numerous measures taken by politicians in Germany and the EU, but also the increasing demand from the USA and Asia, brought about a clear recovery. The expert group therefore expects growth of 3.1 percent in real terms and 4.4 percent in nominal terms in 2021.
Retail and consumer goods
The logistics experts see the retail sector as being characterized by winners and losers. Stationary retail of consumer goods such as clothing, furniture or electronic items had to cope with temporary closures in 2020 and 2021 and had lost the particularly important Christmas business. Even after a future reduction of the measures, there are fears that many of the retailers will suffer losses due to the expected hygiene measures. However, a catch-up effect in this segment will be low, as sales have migrated to other channels (online). The group of experts therefore expects insolvencies. Another loser with significant declines in 2020 is the food service sector, which can only expect a small catch-up effect.
By contrast, food retailers and food delivery services are clear winners, because: Food consumption is currently taking place at home. In general, the demand for goods has not changed much; the goods have merely migrated from the catering trade to the retail trade. The loss of individual, more complex deliveries to larger kitchens would be compensated for by the smaller-scale distribution to the stores of the food retailers. For the logistics sector as a whole, this means a zero-sum situation.
According to the logistics experts, the situation was different for consumer goods that could no longer be purchased over a certain period of time. Here, there has not only been a shift to the online channel, but also growth. As a result of this significant additional expenditure, logistics for the retail trade is increasing overall despite – or rather because of – the shift. This trend will also continue in 2021 and will therefore result in growth in logistics even without higher consumer spending overall.
Based on these outlooks, the expert group expects logistics for traditional retail and online retail as well as the food service industry, including food delivery services, to achieve a nominal growth of around 6 percent. Other sectors of the economy would tend to grow less strongly. Logistics for mechanical engineering, for example, will tend to stagnate, while automotive manufacturing will see slight growth at most. For the chemical industry, 2019 had already been a difficult year, which is why a more significant recovery is expected there. The same is expected in the electrical industry, which will benefit from ongoing digitization, among other things.