POSITIVE TRENDS SHOW SHORT-TERM BREXIT STO…
The latest Supply Chain Trends Survey from the Chemical Business Association (CBA) reveals further evidence of stock building ahead of the UK’s exit from the European Union. These trends appear to be short-term as order books and sales are forecast to enter negative territory in three months time.
CBA’s Chief Executive, Peter Newport, said, “These results confirm anecdotal evidence from member companies. Given the continued Brexit uncertainty and the lack of any real clarity concerning the final outcome of the process, the UK chemical supply chain is taking measures to maintain supplies to the manufacturing and service companies relying on key chemical components for their products and processes.”
The CBA’s latest on-line Trends Survey was conducted during the two weeks, 25 March to 5 April 2019 and is based on responses from 50 member companies.
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 – Significant increase
Members are asked if their order books are better, worse, or the same than during the previous three months. The March/April survey shows a positive balance of +34%, a significant increase from the positive balance of +14% reported in November 2018.
• SALES VOLUMES – Current sales increase; future sales turn negative
Respondents compare their current sales volumes with the preceding three months and indicate their expectations for the next three months. In line with increasing order books, current sales volumes show a positive increase since the last survey of +44% from the +7% reported in November 2018. This trend is not forecast to continue as future sales trends reveal a negative balance of -14% in three months time.
• SALES MARGINS – Current margins increasing; future sales margins 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 swung into positive territory (+22%) from the negative balance (-11%) reported in the last survey in November 2018. This boost is short-term as Respondents forecast sales margins will turn negative (-12%) over the next three months.
• EMPLOYMENT & TRAINING – Still positive, but weaker
Member companies were asked if their employment and training levels would be higher, lower, or remain the same over the next three months. Trends for employment remain positive at +18%, a figure that is historically low but only marginally changed from the +16% balance reported in November 2018. Trends in training remain positive, with a positive balance of +28% reporting higher levels of current training and a higher positive balance of +38% reporting increased training levels over the next three months.