Serious Supply Chain Issues Continue – Business Outlook Remains Poor
17 November 2021
17 November 2021
The latest Supply Chain Trends Survey from the Chemical Business Association reveals that the UK chemical supply chain is continuing to encounter serious supply chain issues and that future sales and margins are continuing to decline.
Over 80% of the companies responding to the survey are facing issues with UK road haulage, whilst higher shipping costs are affecting more than 90% of respondents – with 80% having to manage shortages of shipping containers.
Tim Doggett, Chief Executive, said, “The cumulative impact of this supply chain disruption is delaying or preventing vital materials from reaching customers in the manufacturing and process industries, key utilities, and the health sector. The business outlook for the next three months is poor, with future sales barely in positive territory and sales margins turning negative.”
Our online Supply Chain Trends Survey was conducted between 8-16 November 2021 and is based on responses from 55 member companies.
ABOUT THE SURVEY
The Chemical Business Association’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 ‘betterworse’ responses. The current survey again includes questions to measure the continued impact of current supply chain constraints.
CURRENT ORDER BOOKS – Low activity levels continue
Members are asked if their order books have been better, worse, or the same since the last survey in September 2021. The November survey shows a positive balance of just +5%, a minor increase from the +3% reported in September and a significant decline from the +34% reported in June 2021.
SALES VOLUMES – Current sales show improvement – Future sales decline
Respondents are asked to compare their current sales volumes with the last survey and their expectations for the next three months. Current sales volumes show an improvement, moving into positive territory with a balance of +11%, from -5% in September – though still significantly down from the +42% reported in June 2021. Sales for the next three months are forecast to decline to +2% from +18% in September.
SALES MARGINS – Current margins turn negative and forecast to decline further
Companies compare their current sales margins with the last survey and forecast their trend over the coming three months. Current sales margins have turned negative at -2%, down from +2% in September. Future sales margins are forecast to decline further at -19%, from -13% in September 2021.
EMPLOYMENT – Still positive
Member companies are asked if their employment levels will be higher, lower, or remain the same over the next three months. The employment trend remains positive at +36%, an increase from the +23% in September.
SUPPLY CHAIN CONSTRAINTS – Continuing – no improvement Some 81% of member companies surveyed report shortages of shipping containers. Shipping costs continue to climb with 91% of respondents reporting issues. Some 84% of companies are managing problems with UK road haulage and 78% of respondents report similar issues EU road haulage.
NOTES TO EDITORS
(1) The Chemicals Business Association’s Supply Chain Trends Survey has been published since 2003 and aims to provide a snapshot of short-term trends in the UK’s chemical supply chain.
(2) The Chemical Business Association represents the independent chemical supply chain. Its membership includes distributors, traders, warehouse operators, along with logistics and transport companies. Our members, the majority of which are SMEs, are the main industry interface with thousands of UK downstream chemical users.
(3) Our distributor member companies have an annual turnover of £2.75 billion and employ more than 8,700 people distributing, packing, and blending key chemical components and services to virtually every sector of the UK economy. Our logistics member companies handle more than four million tonnes of chemicals every year.