The BPF survey reveals the thoughts of the UK's plastics industry heading into 2016
This month, BPF Director-General, Philip Law, shares his thoughts on the results of the Federation’s latest Business Conditions survey, which has revealed a much more cautious outlook from those members polled.
BPF has just completed its latest Business Conditions Survey. These are carried out twice a year and they form excellent briefing documents for members, who can measure their own performance against peers; for Government, which takes decisions based on the performance of broad business activity; and the Bank of England, where these documents inform inflation policy. The Bank is attracted by the plastics industry's underpinning of so many manufacturing and distributive sectors and the consequent fact that it acts as a bellwether for the performance of the economy as a whole.
Our latest Survey, carried out in January/February, covered 95 companies, a significant slab of the membership with the bulk of the responses being from the processing sector. Their overall message is that there is a much higher level of caution apparent in the industry's expectations. For example, regarding the UK sales turnover 63 percent of respondents forecasted an increase, down from 72 percent in the last Survey carried out last June. Export sales are expected to fare worse, with 28 percent expecting an increase compared to 39 percent in mid 2015. Half of respondents quoted volatile exchange rates as the reason for the expected slowdown.
32 percent of respondents expected their profitability to increase in the next 12 months down from 39 percent in the June 2015 Survey, and indeed this was the lowest ebb since June 2011. Companies expecting either a decrease or flattening in profitability cited oil and polymer price fluctuations or volatile exchange rates as the major causes of their disquiet.
Oddly enough, expectations of capacity utilisation were actually higher than six months ago at 76 percent, compared to 73 percent. On staffing, 37 percent said they were preparing to increase staff levels, down 15 percent from the more buoyant expectations of twelve months ago. Recruitment of people of the right calibre is still a problem with 51 percent citing difficulties. On investment, 46 percent say they will “invest a little” and 38 percent “significantly”.
With decisions on EU membership looming, we asked the membership to state their opinion on continued participation*. 78 percent wish to remain in membership – 62 percent were satisfied with the EU as it is and 16 percent wanted to remain inside but felt that unspecified changes should be made. 14 percent were undecided and just 8 percent wanted to leave the EU. This broadly compares with other business surveys currently being published.
In other news, companies have a great opportunity to make their mark by entering the latest Horners’ Award Competitions for Plastics Design and Innovation and for Bottlemakers. Get your entries into the BPF by July 31st 2016. The winner will feature at the prestigious Horners' banquet at the Mansion House in the City of London on 6th October. The prizes will be awarded by the Lord Mayor. For further information contact Mike Birrell on email@example.com Great benefit can accrue to the winning companies as recipoients of the Horners Award accolade. A whole series of iconic products have been helped on their way since the 1940s by winning the Award, the 'Topper Dinghy' just one of them.
Finally, for advice on energy efficiency, attend a seminar on managing your Climate Change Agreement to be organised by BPF Energy on April 13that the office of Squire Patton Boggs in central Birmingham. Priced at £25 per delegate this is a cost effective day and for more information contact firstname.lastname@example.org