Members of the British Plastics Federation have shown caution in the face of uncertainty in their predictions for business growth according to the findings of its latest survey.
Responding to the Federation’s ‘Business Conditions Survey’, which was sent to members the day after the UK’s decision to leave the European Union was announced, 120 respondents from across the UK plastics industry were more cautious in their predictions for turnover, profitability and investment.
Just over half of respondents said they expected to see an increase in turnover, which is down from the 63 percent in the previous survey. However, this is still a significantly higher number than the eight percent seen in January 2009 during the depths of the recent recession.
Exchange rates and raw materials process were the major reasons members cited for being less optimistic about profitability in the coming months, down 12 percent on the last survey at 20 percent. Despite this, more than half of respondents expected their profitability to stay the same.
Regarding export sales, 40 percent of respondents predicted an increase, highlighting the weakness of the pound as a competitive advantage.
Despite the uncertainties, the majority of firms (63 percent) said they were still planning to “invest a little”, with only 13 percent ceasing investment at all.
“What is clear from this survey is that our members are cautious about their economic performance in the short term,” explained Philip Law, Director General of the British Plastics Federation.
“With so many unknowns and the devaluation of the pound affecting the price of raw materials 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.
“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 and we would expect a clearer message when we survey the members again at the start of next year.”
A strategy for the UK Plastics Industry
Despite the unknowns facing the UK plastics industry in terms of BREXIT, the British Plastics Federation has launched a strategy document to ensure that the UK remains a key player in the global market.
‘The UK Plastics Industry: A Strategic Vision for Growth’ has been developed over the last 18 months in close consultation with 40 leading companies from across the plastics supply chain and clearly identifies seven areas to promote growth, highlight opportunities and address challenges facing the industry.
These key areas include promotion of the industry, skills and education, securing feedstock, sustainability, exporting and reshoring, enhanced industry collaboration and identifying future markets.
“This is a £23.5billion industry that employs 170,000 people in the UK. As one of the largest employment sectors in the whole of UK manufacturing, it is crucial our industry has a clear roadmap in order to capitalise on the opportunities that lie ahead,” commented David Hall, President of the British Plastics Federation.
“Plastics are se to be the material of the 21st Century – and the BPF wants to ensure that the UK plastics industry remains at the forefront of these exciting developments.”
The document, work on which was supported by the former Department for Business, Innovation and Skills, is intended to help inform the Government’s overall industrial strategy.
It makes a number of requests to Government, including recognition of plastics as a material of strategic national importance, continuation of UKTI funding for exporters, support for plastics’ inclusion within the national curriculum, green procurement policies and a periodic review of raw materials tariffs.
It will be used by BPF member firms as a basis for discussion with their local MPs and financial stakeholders.
Philip Law added: “The BPF itself will be targeting ministers and civil servants with the fundamental message that the UK’s ambition for global growth on the back of high value manufacturing is simply not possible unless it is underpinned by a thriving plastics industry.”
The full document can be accessed here: www.bpf.co.uk/plastics-strategy/default.aspx