INDUSTRYNEWS
Survey shows Industry is Cautious in the Face of Uncertain Business Conditions
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THE BRITISH PLASTICS Federation( BPF) latest Business Conditions Survey, which was circulated immediately following the result of the EU referendum vote, gives an insight into how the industry predicts the result of the recent referendum will affect the plastics industry.
The survey showed that despite the uncertainty, over half of the companies surveyed were predicting an increase in sales turnover. This is down from 63 % in the previous survey but is nowhere near the 8 % seen in January 2009 during the depths of the recent recession.
Companies were more cautious in their predictions on profitability, with only 20 % predicting an increase( down from 32 % in the previous survey), with many companies citing exchange rates and the subsequent impact on raw material prices as a reason. Despite these factors, more than half those surveyed were predicting that their profitability would stay the same.
With the value of the pound falling, when asked about predictions on export sales, 40 % of respondents predicted an increase, with two thirds of them highlighting the weakness of the pound as a competitive advantage.
When asked about investment intentions, 27 % stated that they plan to invest significantly( down from 38 % six months ago). However, only 13 % stated that they planned not to invest at all, with the majority of firms( 63 %) stating that the plan to“ invest a little”. This shows that, despite the uncertain business environment, there is no sign that companies
are going to stop investing in plant and equipment.
Investment intentions mirrored companies’ intentions in terms of recruitment, with a third of companies planning to increase their headcount over the next 12 months.
“ With so many unknowns and with the devaluation in the pound affecting the price of raw material and machinery, it is unsurprising that in the few days and weeks following the result of the referendum we see a slight downturn in some of the key economic predictions,” commented Philip Law, Director General of the British Plastics Federation.“ In reality it will be some time until we really know and understand the full effects that the referendum vote will have on the industry.”
The BPF’ s latest Business Conditions Survey was conducted in June and July 2016 and was completed by 120 member firms.
LETTER TO THE EDITOR
Having spent a lot of time since Brexit talking to customers about its possible implications on our supply chain, I’ m writing to set out DOORCO’ s stance on the development. Fundamentally, I believe no organisation can afford to knee-jerk to the immediate financial situation, so DOORCO will continue to adopt a business as usual approach, while carefully monitoring the next few months to see how things play out.
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I’ VE EXPLAINED TO customers that the significant stock DOORCO holds right now in the UK and indeed stock currently in transit to us, has not been affected by any price increases. Neither will we see surcharges on the orders we place in the next few weeks because our Korean partners hold significant stock at pre- Brexit prices. So, as things stand we will not be implementing increases. However, we must be realistic and mindful that this situation could well change in coming months. Everything is uncertain at the moment. So many things are up in the air that could directly affect our industry – the position of Sterling, current and future trading agreements, legislative changes including employment and even testing standards and compliance. But equally, things may even out when Article 50 is finally triggered.
The point is nobody knows how things will develop. There’ s a great saying here in the North – when in doubt, do nowt. It may sound clichéd, but I believe
‘ we must be realistic and mindful’
that’ s what every business should be doing at the moment – sitting back, taking a deep breath, monitoring the situation daily and most importantly, maintaining two-way dialogue with customers. This is precisely what DOORCO is doing and will continue to do.
Dan Sullivan, Managing Director, DOORCO
Do you have something to say? Email becky @ cvgroup. co. uk
12 » SEP 2016 » CLEARVIEW-UK. COM