Chemical Business Association News

Our latest Supply Chain Trends Survey shows an improving trend in order books, current sales, and margins but a negative business outlook for the next three months.  The survey highlights the key supply chain issues resulting in lower future sales and margins – a shortage of shipping containers, rising shipping costs, and a shortage of road haulage capacity in the UK and European Union.

Tim Doggett, The Chemical Business Association’s Chief Executive, said, “The current business situation has improved over the last three months, but most member companies are reporting serious issues in the international supply chain resulting in significant delays, logistical gridlock, and massively increased shipping costs. This is compounded by the chronic shortage of HGV drivers aggravated by the combined impact of Brexit and Covid-19.”

Our on-line Supply Chain Trends Survey was conducted between 8-18 June 2021 and is based on responses from 72 member companies. The survey was also available on Linkedin.

ABOUT THE SURVEY

The Supply Chain Trends Survey asks companies to provide information on order books, sales, sales margins, and employment, on a ‘better–worse–same’ basis. The current survey included four additional questions on current supply chain constraints. 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 – Improving

Members are asked if their order books have been better, worse, or the same during the last three months since March 2021. The current survey shows a positive balance of +35% in the strength of order books – an improvement of +21% since the last survey in March 2021

• SALES VOLUMES – Current sales rising; future sales forecast to fall

Respondents compare their current sales volumes with the preceding three months and indicate their expectations for the next three months. Current sales volumes have risen over the last three months, showing a positive balance of +43% (March 2021, +26%).  The trend for the next three months is significantly weaker: showing a positive balance of +6% – a fall of 24% on the figure reported in Mach 2021.

• SALES MARGINS – Current margins improving; forecast margins turn negative

Companies compare their current sales margins with the preceding three months and forecast their trend over the coming three months.  Current sales margins have moved into positive territory at +11% a survey-to-survey improvement of 39%. Future sales margins are forecast to decline stage in the next three months a show a negative result of -15% in comparison to the +6% reported in March 2021.

• EMPLOYMENT AND TRAINING – Continued improvement

Member companies are asked if their employment levels will be higher, lower, or remain the same over the next three months.  The employment trend shows a continued improvement with a positive balance of +35% (March 2021, +33%).

• SUPPLY CHAIN CONSTRAINTS – Worsening and becoming acute

Some 85% of our member companies surveyed report shortages of shipping containers; 90% report rapidly escalating shipping costs; and 62% report capacity issues with road haulage in the UK, with 76% reporting similar constraints in the European Union.