The UK warehousing sector has almost doubled in size over the past decade with Brexit, the pandemic and the rise of online shopping fuelling growth.
A report by the ONS found that the number of UK business premises classified as transport and storage was 88% higher in 2021 than in 2011, and 21% higher than in 2019.
Rise of the UK warehouse
The report – ‘The rise of the UK warehouse and the “golden logistics triangle”’ – notes several indicators of growth in the sector.
It states: “Online shopping as a percentage of retail sales, new orders for the building of warehouses, and job adverts in transport, logistics and warehousing have all increased substantially compared with before the coronavirus pandemic. This could partly reflect changes initiated by coronavirus restrictions or supply chain adjustments made after EU exit”.
This has contributed to a sharp rise in new warehouse construction projects – new orders for the building of warehouses were worth £5.6bn in 2021, the highest figure since 1985.
Online shopping as a percentage of all retail sales peaked at nearly 38% in January 2021, having stood at 8% at the start of 2011 and 19% in February 2020.
It has since fallen back but remains around 28% for February 2022.
Sector even bigger?
The UK Warehousing Association (UKWA) cautiously welcomed the ONS report but flagged concerns that the data didn’t include retail players and wholesale logistics users such as Amazon, Tesco and DHL.
“The omission of the big retailers from the figures definitely means the report seriously underestimates the size of the warehousing market and its growth,” a spokesperson said.
Amazon alone is to create five new warehouses and more than 10,000 jobs in the UK, reports the Mirror.
UKWA said the ONS’ findings were in line with the conclusions from its own recent report which showed that the transport, storage and logistics sector is critical to the government’s levelling up agenda.
Clare Bottle, chief executive of the Bottle called for more support from government.
“Transport and storage growth is the fastest growing of any industry group, and our sector – along with e-commerce – is expected to continue to grow. Yet there is little or no government support for our sector in meeting the serious challenges of current labour shortages, planning and the transition to net zero,” she said.
According to the report, the industrial and logistics sector is responsible for 3.8 million jobs, contributing £232bn in GVA, and will increase productivity by 29% between 2025 and 2039.
It said that in 2021 warehouse space had risen by 32% to 566 million ft squared, with occupancy by online retailers jumping to 614% to 60 million ft2. Amazon took 12.6 million ft squared in 2020 alone.
Looking ahead, prime warehouses are predicted to rise by 12.5% in 2022 and 8.5% in 2023.
The report showed that demand for logistics space across England has been underestimated in planning policy for a decade, and future demand is likely be at least 29% higher than the levels seen in recent years.