Current order books and sales have continued to rise over the last three months for the UK’s chemical supply chain – but whilst current sales margins remain neutral, the outlook for future sales margins has entered positive territory for the first time this year.
The Chemical Business Association’s latest Supply Chain Trends Survey was conducted on-line during the two weeks, 5-19 June 2017, and is based on responses from 37 member companies.
Overall, current levels of trading activity are returning to more normal levels after turning sharply negative in the aftermath of the Brexit vote. However, member companies remain cautious about forecasting continued sales growth or significant improvements in current and future sale margins.
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 improvement
Members are asked if their order books are better, worse, or the same than in the previous three months. The survey shows a positive balance of +54%, a marked improvement on the figure of +37% recorded CBA’s last survey in March 2017.
• SALES VOLUMES – Current sales continue to rise – but may lose momentum
Respondents are asked to compare their current sales volumes with the preceding three months and indicate their expectations for the next three months. Current sales volumes are now showing a positive balance of +51% that continues the upward trend from the last survey (+31%).
Members are less confident that sales will continue to rise over the next three months with a positive balance of +16% of respondents taking a bullish view of future sales – compared with a positive balance of +39% in the March 2017 survey.
• SALES MARGINS – remain neutral with marginal improvement in the pipeline
Companies are asked to compare their current sales margins with the preceding three months and forecast their trend over the coming three months. Current sales margins are neutral, with exactly the same number of respondents reporting an improvement in margins as are reporting a decline in margins.
Future sales margins are creeping into positive territory with a positive balance of 8% of respondents expecting them to improve over the next three months as opposed to a negative balance of -15% in the March 2017 survey.
• EMPLOYMENT – positive trend continues
Member companies remain positive about employment levels. The current Survey shows a positive balance of +29% in the number of companies believing they will increase employment over the next three months (March 2017, +27%).