London – UK chemicals industry’s order books and sales have bounced back over the recent months, according to the last supply chain trends survey by the Chemical Business Association (CBA).
The survey, conducted during the two weeks from 5-16 Oct, was participated by 65 member companies – the highest level of responses since these surveys began seven years ago, CBA announced 19 Oct.
The quarterly poll asks companies to provide information on order books, sales, sales margins, and employment, on a ‘better–worse–same’ basis.
To measure short-term trends, the analysis ignores responses answering ‘same’ and focuses on the positive or negative balance provided by the difference between the ‘better-worse’ responses.
On the current book orders, the survey showed a balance of 20%, representing a positive swing of 53% in the three months since CBA’s last survey in June, when orders where down 33%.
Respondents were asked to compare their current sales volumes with the preceding three months and indicate their expectations for the next three months.
Current sales volumes, according to the survey, have bounced back into positive territory, showing a balance of 25%, up 56% since the last survey in June.
The outlook for the next three months is subdued but remains positive at 5%, down from 9% reported in the last survey.
Companies were also asked to compare their current sales margins with the preceding three months and forecast their trend over the coming three months.
Current sales margins were down 6% while future sales margins show a negative 32% outlook.
The negative trend also continued in terms employment levels. In June 2020, for the first time since these surveys began in 2013, member companies reported a negative trend in employment at 8%.
The trend, according to CBA, has continued with a negative outlook for employment of 11% in the current survey.
“This Survey shows the volatility of the current market,” said Peter Newport, CBA’s CEO.
According to Newport, a return to normal from full Covid-19 lockdown contributed to the bounce back.
In addition, he said, companies are stock building to prepare for “a no deal exit” from the European Union.
“This Brexit outcome has also resulted in the three-month outlook for sales margins declining by more than 25%,” he said.