LOGISTICS & MANUFACTURING
Sector needs political and economic certainty to unlock new investment
Uncertainty is currently the key pressure point across the whole of the logistics and manufacturing sector.
Although we have seen a quarter percent reduction in the interest rate, the underlying pressures of stubborn inflation will likely hinder the ability of the Bank of England to reduce the rate further and quickly. Before the general election, the consensus across most markets was that a one percentage point drop would be enough to spark an increased investment appetite.
Some developments are still moving forward, however, and this is being driven by a steady increase in occupier demand. The commitment to net zero by many businesses will continue to push the need for greener and carbon-efficient space, which will drive the refurbishment of existing stock when it comes available.
Uncertainty over the new government’s approach to investment and support for the manufacturing sector, in advance of its first Budget in October, will fuel the hesitancy of investors, both domestic and foreign. Once that clearer direction of travel is unveiled, it will provide more certainty for investors to commit capital with confidence.
Add to that the growing unpredictability surrounding the global political and economic landscape and everything points to another six months of uncertainty for the logistics and manufacturing sector.
