UK chemicals sector reports 60% decline in order books, sales

Crewe, UK – The UK’s chemicals industry has registered a “major decline” in order books and current sales, due to the Covid-19 pandemic, according to the latest supply chain trends survey by the Chemical Business Association (CBA).

Conducted during the two weeks from 8-19 June, the online survey was participated by 58 member companies, CBA announced 22 May.  

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 are better, worse, or the same than during the previous three months.  The June survey shows a negative balance of 33% – down 66% from a positive balance of 33% earlier in March. 

Similarly, comparing their current sales volumes with the preceding three months, respondents reported a sharp 31% decline in revenue, reflecting a drop of 63% from the 32% positive balance in March.

The outlook for the next three months remains positive at 9%, up from 5% reported in March.

Forecasts for current sales margins remained positive at 4%, posting a slight improvement on the last survey when margins were neutral at 0%.  

The outlook for future sales margins remained unchanged compared to the previous survey at negative 7%.

Asked if their employment levels will be higher, lower, or remain the same over the next three months, respondents reported an 8% negative trend.

This is the first time the employment trend turns negative since the start of the survey eight years ago, reflecting the impact of Covid-19 and the future uncertainty in levels of business activity, said CBA.   

Commenting on the results of the survey, CBA chief executive Peter Newport said the 60% decline in order books and current sales as well as the ‘worrying’ trend in employment were a result of the global pandemic. 

The Covid-induced severe economic downturn as well as the increasing likelihood of a no-deal Brexit represent “a perfect storm” for the chemical supply chain, Newport added.

“And [the effects of the storm] are beginning to be reflected in our survey,” he added.