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