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Stefan Wundrak

The economy shall not live by retail alone

Stefan Wundrak (Director of Research) discusses the importance of the manufacturing industry in logistics space take-up.

The rise of e-commerce has focused attention on logistics. It easily gets lost that manufacturing accounts for a significant share of logistics space. Even in the UK, arguably Europe’s most serious shopping nation, only 37% of take-up was retail-related and only 1% pure e-commerce in 2013 (CBRE). In Germany, about 50% of logistics stock is used by logistics service providers working for manufacturing, retail, wholesale and international trade clients. Retailers and manufacturers account for the rest with 30% used by retailers and 20% by manufacturers (Fraunhofer SCS).

The case for keeping an eye on the geographical distribution of manufacturing is twofold:

Firstly manufacturers are not far behind retailers in terms of demand for logistics space. Since off-shoring of manufacturing away from Europe has peaked, or in some cases even reversed on the back of rising competitiveness, manufacturing no longer can be dismissed as a sector in terminal decline.

On the contrary, and here lies a more subtle reason for paying closer attention to manufacturers’ location choices, it is increasingly recognized that growth of business service industries depend on the presence of the manufacturing and technology sector it services. To put it in simple terms: London’s bankers, IT-consultants and lawyers have less to do if Munich’s car manufacturers are not thriving and calling on their services.

As the map below shows, south-western Germany and northern Italy remain at the core of Europe’s manufacturing industry. Off-shoring has meant some Central European countries, in particular Poland, Slovakia and the Czech Republic, are also production heavy. In other parts of Western Europe the manufacturing base has become quite thin on the ground with only pockets remaining in the Northwest of England, the Basque country, around Porto and outside the capital cities in the Nordic region.

Stefan Wundrak

Stefan Wundrak

Head of European Research

Stefan's biography