CBA News

Order books and sales have bounced back since the last Supply Chain Trends Survey by the Chemical Business Association (CBA) in June 2020 and are now showing a positive survey-to-survey swing of more than 50%. Future sales margins, on the other hand, are forecast to fall by more than 25% over the next three months.

Peter Newport, CBA’s Chief Executive, said, “This Survey shows the volatility of the current market. CBA’s view of the bounce back is that it is caused by a combination of two factors. Firstly, a return to more or less normal working by most downstream sectors after the full national Covid-19 lock down. Secondly, 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%.”

The CBA’s on-line Trends Survey was conducted during the two weeks from 5-16 October 2020 and is based on responses from 65 member companies – the highest level of responses since these surveys began seven years ago.

ABOUT THE SURVEY
CBA’s Supply Chain Trends Survey 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.

• CURRENT ORDER BOOKS – positive swing of more than 50%
Members are asked if their order books are better, worse, or the same than during the last three months. The October 2020 survey shows a balance of +20% – this represents a positive swing of +53% in the three months since CBA’s last survey (June 2020, -33%).

• SALES VOLUMES – Current sales rise by more than 50%
Respondents compare their current sales volumes with the preceding three months and indicate their expectations for the next three months. Current sales volumes have bounced back into positive territory, showing a balance of +25% which is a swing of +56% since the last survey in June 2020. The outlook for the next three months is subdued but remains positive at +5% (June 2020, +9%).

• SALES MARGINS – Margins turn negative; future margins fall by 25%
Companies compare their current sales margins with the preceding three months and also forecast their trend over the coming three months. Current sales margins have. turned negative at -6%. Future sales margins accelerate this trend and have also turned negative (-32%) a fall of 25% since the last survey in June 2020.

• EMPLOYMENT – negative trend continues
Member companies are asked if their employment levels will be higher, lower, or remain the same over the next three months. In June 2020, for the first time since these surveys began in 2013, member companies reported a negative trend in employment (-8%). This trend has continued with a negative outlook for employment of -11% in the current survey.

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Further information from:
Peter Newport, CEO
01270 258200
www.chemical.org.uk