MAJOR DECLINE IN ORDER BOOKS AND SALES – EMPLOYMENT TURNS NEGATIVE

The latest Supply Chain Trends Survey from the Chemical Business Association (CBA) shows a major decline in order books and current sales as well as the industry’s forecast for employment turning negative.

Peter Newport, CBA’s Chief Executive, said, “This Survey shows the impact of the Covid-19 pandemic with order books and current sales showing more than a 60% negative swing since our last survey in March. Worryingly, trends in employment have turned negative for the first time since we started running these surveys eight years ago.”

“Emerging from the Covid-19 lock-down, an imminent and severe economic downturn, plus the increasing likelihood of a No Deal Brexit represents a perfect storm for the UK’s chemical supply chain and are beginning to be reflected in our survey,” he added.

The CBA’s on-line Trends Survey was conducted during the two weeks from 8-19 June 2020 and is based on responses from 58 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 – Major negative swing

Members are asked if their order books are better, worse, or the same than during the previous three months. The March survey shows a negative balance of -33% – an adverse swing of 66% since CBA’s last survey in March 2020 which reported a positive balance of +33%.

SALES VOLUMES – Sharply negative

Respondents compare their current sales volumes with the preceding three months and indicate their expectations for the next three months. Current sales volumes have turned sharply negative at -31%. In March, members companies reported a positive balance of +32%. This represents a significant decline of 63% in business sentiment. The outlook for the next three months remains positive at +9% (March 2020, +5%).

SALES MARGINS – Barely positive and forecast to turn negative

Companies compare their current sales margins with the preceding three months and also forecast their trend over the coming three months. Current sales margins are now barely positive at +4%, a marginal improvement on the last survey when margins were neutral (at 0%). The outlook for future sales margins remains negative at -7%, the same outcome as our last survey in March 2020.

EMPLOYMENT – turned negative for the first time

Member companies are asked if their employment levels will be higher, lower, or remain the same over the next three months. For the first time, in the eight years of these surveys, member companies have reported a negative trend in employment of -8% a reflection of the impact of Covid-19 and the future uncertainty in levels of business activity.

Previous articleKobold’s Magnetic Inductive Flowmeters for measuring and monitoring electrically conductive liquids
Next articleJOHNSON MATTHEY ANNOUNCES COMMISSIONING OF LARGEST METHANOL PLANT IN WORLD