Transport & Storage Trading Showing Resilience Despite Many Firms Having Less Than a Month’s Cash Reserves

The UK seems quite an uncertain place right now, and the government’s budget announcement at the end of October last year didn’t help. Companies and all sorts of organisations are re-examining their own budgets, that probably already didn’t look too healthy.

Earlier this month, the Office for National Statistics published the first of its Business Insights & Conditions Survey since the start of 2025, reporting on the survey carried out in the second half of December 2024.
https://www.ons.gov.uk/releases/businessinsightsandimpactontheukeconomy9january2025

What one of the questions revealed is that the number of businesses saying they have no cash reserves jumped to 15.3%, with the previous highest having been 12.7% back in March 2024 – the question was first asked in June 2020. The ONS had over 10K responses to this survey.

What is shown in the graph is the response by companies to the question: How long do you expect your business's cash reserves will last? The proportion of businesses giving particular answers is shown by the coloured bars: Business has no cash reserves (shown as black – that’s black as funereal as opposed to ‘being in the black’!), Less than 1 month (red), 1 to 3 months (orange), 4 to 6 months (yellow), More than 6 months (green), and Not sure (shown in grey).

The response data did include entries with [c] instead of a number, this is where data has been removed for confidentiality reasons, such as percentages less than 1% or breakdowns with a count of 10 or less. So in this graph, [c] has been replaced by 0.5% for Education, an amount that makes no difference to the shape of the rest of the bar, but which does demonstrate that there were a tiny number of respondents in Education indicating they had no cash reserves – that little sliver of black at the start of the bar. The sharp-eyed will also notice that the Water industry isn’t included – this is because the small number of companies results in all entries having [c], which doesn’t work well on a graph!

So what does the graph show us? It shows us that Transport & Storage (that will be across all modes and will include passenger), followed by Construction, Accommodation & food service and Wholesale & Retail, are the businesses most likely to say that they have no cash reserves at all, not even ‘less than 1 month’. Indeed, if we widen the bracket, nearly half (49.2%) of Transport & Storage companies have either no cash reserves or less than a month. And this is for those that report that they are currently trading.

The period shown spans December 2021 through to December 2024. These surveys are carried out in waves. The wave shown on the graph was Wave 123 and spanned the period 16 to 29 December 2024. What we can’t see on the graph is that the number of companies in this situation has been growing.

While company finances need a close focus as we go into spring, with various wage bill implications from the budget, and the impact of potential changes to employment legislation being explored, the good news is that there were very few Transport & Storage businesses reported actual insolvency or high risk in the same survey, and that more Transport & Storage companies were fully trading than in any other business sector.

Kirsten Tisdale FCILT, Director – Logistics Consulting, Aricia Limited
 
26th January 2025