ORDER BOOKS AND SALES RECOVER – SALES MARGINS NOSE DIVE
10 November 2016
10 November 2016
The Chemical Business Association’s (CBA) latest Supply Chain Trends Survey reveals a recovery in order books and sales but a sharp fall in current and future sales margins.
CBA’s last Trends Survey, in June, took place against a background of the Brexit vote and reflected the industry’s concerns about the uncertainty immediately following the Referendum decision. The current Survey is therefore the first to measure business sentiment in the months following the Brexit vote.
The Survey is based on responses from 42 member companies.
About the Survey
CBA’s 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 all responses answering ‘same’ and focuses on the positive or negative balance provided by the difference between the ‘better-worse’ responses.
• Order Books
Members are asked if their current order books are better, worse, or the same than in the previous three months. The current Survey shows a positive balance of +21% – a figure that returns to the levels of the March 2016 Survey.
• Sales Volumes
Respondents are asked to compare current sales volumes with the preceding three months and indicate their expectations for the next three months. Current sales volumes, showing a positive balance of +24%, have almost returned to their pre-Referendum levels. Respondents are more cautious in relation to future sales volumes. Whilst showing a positive trend (+15%), future sales volumes are still below levels reported in March 2016 (+30%).
• Sales Margins
Members are asked to compare current margins with the prior three months and provide a forecast for the next three months. Whilst trends in sales margins have been the most volatile aspect of these Surveys, respondents experience of current sales margins and forecasts for future margins have turned sharply negative. The Survey shows a negative balance of -33% in terms of current margins and a negative balance of -35% in relation to the trend for future margins.
During the last three years, CBA members have generally been positive about increasing the levels of employment in their companies. This trend is continuing, with the current Survey showing a positive balance of +17% companies believing that employment levels will increase over the next three months.
Further information from:
Chief Executive Officer, CBA
NOTES TO EDITORS
(1) The CBA represents the independent chemical supply chain. Its membership includes distributors, traders, warehouse operators, along with logistics and transport companies. CBA’s members, the majority of which are SMEs, are the main industry interface with thousands of UK downstream chemical users.
(2) CBA member companies employ more than 7,600 people. They distribute, pack, and blend over 3.5 million tonnes of chemicals each year with a market value of almost three billion euros. CBA’s logistics member companies report that they handle more than four and a half million tonnes of chemicals annually.