Logistics UK: Logistics “doubles your money” for the UK economy
Every £1 of economic activity that the logistics sector generates directly creates a further £1.04 across the wider economy. That is the headline finding of new research from business group Logistics UK, produced in association with Capital Economics.
The report also suggests that a 1% increase in logistics’ share of the economy could attract £30 billion of foreign investment into the UK. That equates to more than £1,000 per household. The research shows that the sector underpins £356 billion of economic activity, 5.3 million jobs and £65 billion in tax revenues. It also enables more than £1 trillion of international trade every year.
A message for the Chancellor
Independent macroeconomists at Capital Economics launched the modelling today (27 October) at the Houses of Parliament, on the eve of the Budget. The analysis examines the indirect, induced and catalytic impact of the logistics sector on the UK economy. It shows that the sector’s influence reaches well beyond its £175 billion direct annual contribution.¹ Logistics businesses and workers add a further £181 billion each year through their own personal spending.
“With the Budget imminent, my message to the Chancellor is that the logistics sector doubles your money,” says Logistics UK’s 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.”
Supply chains and employee spending
The report, UK logistics: a critical driver of growth and investment, sets out the sector’s wider impact in detail. Spending by logistics businesses with their UK suppliers supported over £90 billion of gross value added (GVA) across the economy in 2024. It also supported 1.5 million jobs. Five sectors each gained more than £10 billion in GVA from this activity: transport, administrative services, professional services, finance and manufacturing.
Logistics employees add to the total through their own spending. They buy goods and services from UK businesses, and this “induced” activity contributed another £90 billion in GVA in 2024. It supported a further 1.1 million jobs.
Billions for the Exchequer
Capital Economics found that the logistics sector contributes £30 billion a year in tax revenue. The Exchequer receives a further £34 billion from spending by logistics businesses and their workers. Together, these figures give the Treasury a clear financial reason to back the sector.
A boost for foreign investment
The research also identifies a significant investment dividend from a strong logistics sector. Alongside the gains in GVA, tax revenue and jobs, the analysis quantifies the well-documented link between a thriving logistics sector and foreign direct investment (FDI). FDI is a key driver of productivity, innovation and economic growth.
The modelling suggests that a one percentage point increase in logistics’ share of total GVA is associated with a one percentage point increase in FDI as a share of total GDP. That is equivalent to a £30 billion boost to the economy, or more than £1,000 for every UK household.
“International companies invest in countries where goods move efficiently,” continues 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.”
¹ Source: Logistics UK, Logistics Report 2026
