UK chemicals order books, sales turn positive

London - The outlook for both order books and sales within the UK’s chemicals industry have turned positive, while sales margins remain under pressure according to the latest supply chain trends survey conducted by the Chemical Business Association (CBA).
 
Conducted between 7 and 19 Nov, the on-line survey was participated in by 51 member companies, said CBA in a statement 22 Nov.
 
The survey asked 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 ignored responses answering ‘same’ and focuses on the positive or negative balance provided by the difference between the ‘better-worse’ responses.
 
As part of the survey, members were asked if their order books were better, worse, or the same than during the previous three months.  The results showed a positive balance of +13% a recovery from the -26% negative balance reported by CBA’s previous quarterly survey in July 2019.
 
Similarly, comparing current sales volumes with the preceding three months, the survey reflected a 12% positive response, a significant recovery from the negative balance of 17% reported in the July 2019 survey.
 
The outlook for the next three months also shows a positive trend of 18%, up from the negative 14% reported in the previous 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. 
 
Here, current sales margins have recovered to a positive balance, with 2% of respondents experiencing improved sales margins. The figure shows a significant recovery from the negative balance of 18% reported in the pervious survey.
 
The outlook for future sales margins, however, continued to remain negative with -8% of companies feeling they are likely to decline over the next three months. 
 
Asked if their employment levels will be higher, lower, or remain the same over the next three months, 2% of the respondents stated that they expected higher employment levels.
 
The figure is on a par with the result of the survey conducted in July, but remains the lowest level recorded since these surveys began in 2013.
 
Commenting on the survey, CBA chief executive, Peter Newport said he welcomed the “limited” recovery.
 
“It remains difficult to assess the continuing impact of the overhang of stock building in relation to the past Brexit deadline of 31 October or the preparations for the prospective deadline of 31 January next year,” he noted.
 
According to Newport, many CBA members are under pressure as a result of “financing historically high stock levels and availability of regulatory compliant warehousing.”