66
GATHERING GLOOM
ASSOCIATION • CBA’S LATEST SUPPLY CHAIN TRENDS SURVEY POINTS TO A POTENTIAL DOWNTURN IN UK TRADING CONDITIONS AFTER THE BREXIT VOTE
TO MEASURE THE impact on business sentiment of the UK’s recent decision to leave the EU, the UK Chemical Business Association (CBA) undertook its most recent Supply Chain Trends Survey in two parts, first during the week prior to the referendum and then again in the week following the outcome. The two samples, totalling 43 member companies, or 35 per cent of the CBA membership, were then analysed separately, with the 23 responses received prior to the vote compared with the 21 responses received the week after. “CBA is confident that double counting between the two samples is not an issue,” it says. “As a benchmark, the analysis also shows the results of the last Trends Survey in March 2016.”
BETTER–WORSE–SAME CBA’s Trends Survey asks companies to provide information on order books, sales,
UNCERTAINTY OVER THE TERMS UNDER WHICH THE UK WILL LEAVE THE EU ARE HAVING A MARKED IMPACT ON BUSINESS CONFIDENCE
sales margins and employment on a ‘better– worse–same’ basis. To measure short-term trends, the analysis ignores all responses answering ‘same’ and focuses on the positive or negative balance provided by the difference between the ‘better-worse’ responses. When asked if their current order books
were better, worse or the same compared to the previous three months, a positive balance of 30 per cent was recorded prior to the referendum with this changing to a negative 4 per cent afterwards. This compares to +21 per cent in March. “Responses to this question measure orders already received from customers,” CBA says. “Despite this, the response following the Brexit vote shows a significant negative swing affecting more than one third of respondents.” Respondents were also asked to compare
current sales volumes with the preceding three months and indicate their expectations for the coming three. Again, CBA says, “the pessimism following the Brexit vote appears to be influencing more than a third of responses”. In March, there was a 9 per cent positive balance in terms of current
sales and a 30 per cent positive balance with regard to future sales. In the week prior to the referendum this had changed to +22 per cent and +18 per cent, respectively, falling to +4 per cent and -28 per cent after the vote had taken place.
MARGINS AND MORE Members were similarly asked to compare current margins with the prior three months and then provide a three-month forecast. “Though historically trends in sales margins have been the most volatile aspect of the Trends Survey, the decline in expectations after the Brexit vote is more significant than any previous Survey,” the Association says. Immediately prior to the vote, there was a negative balance of 8 per cent for both current and future margins. This then fell to -20 per cent and -35 per cent, respectively, following the referendum. This compares to +9 per cent and -14 per cent in March 2016. This past March there was also a+12 per
cent balance among members when it came to whether they expected to increase staff numbers over the next three months. This rose to +21 per cent in the week prior to the referendum but then subsequently fell to -14 per cent. “Over the last three years, CBA members have generally been positive about increasing the levels of employment in their companies. It would be fair to consider the response following the Brexit vote as reflecting companies’ uncertainty about future trading conditions,” it says. HCB
www.chemical.org.uk
HCB MONTHLY | SEPTEMBER 2016
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108
