The Chemical Business Association’s latest Supply Chain Trends Survey reveals that order books and sales have continued their upward trend over the past three months, whilst current and future sales margins show improvement but still remain negative.
This is CBA’s second Trends Survey since the Brexit vote and reflects a return to something approaching normality in terms of the levels of trading activity.
For the time being, despite continuing uncertainties, pragmatism seems to have influenced business sentiment, particularly in the short-term outlook for sales.
The survey is based on responses from 48 member companies and asks for 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. Each year, the Spring survey includes a question aiming to assess member companies’ intentions regarding training their employees.
• CURRENT ORDER BOOKS – marked 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 +37% – a marked improvement on the figure of +21% recorded in CBA’s last survey in November 2016.
• SALES VOLUMES – continue their upward trend
Respondents compare 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 +31% that continues the upward trend from the last survey (+24%). Members are also confident that sales will continue to rise over the next three months with a positive balance of +39% of respondents taking a bullish view of future sales – compared to positive balance of +15% in the November 2016 survey.
• SALES MARGINS – remain in negative territory
Current and future sales margins continue to be the most volatile aspect of these Surveys, and they remain in firmly negative territory – though have improved since the last survey. Current margins show a negative balance of -21% (-33% in November 2016) and expectations for future margins reveal a negative balance of -15% (-35% the last survey).
• EMPLOYMENT – positive trend continues
Member companies remain positive about employment levels in their companies. The current Survey shows a positive balance of +27%, a rise of 10% in the number of companies believing they will increase employment over the next three months (November 2016, +17%)
• TRAINING – investment in current and future training higher
A positive balance of +23% of members has undertaken higher levels of training in the last three months compared with the previous quarter. This is slightly lower than the comparable figure for 2016 (+30%). This level of investment in training is forecast to continue, with a positive balance of +37% of respondents budgeting for higher levels of training in the coming three months (2016, +32%).