Philip Law announces news this issue of its annual survey and what the responses from member firms indicate in terms of the industry’s overall health. He also looks at plastics packaging and the ongoing battle to promote its positive benefits.
I've just returned from a short trip celebrating the Tet lunar New Year in Hanoi with my Vietnamese family. All oracles combine to suggest that the Year of the Goat will be very good for business in Vietnam, following several years of economic lassitude. But in the UK we are at a more advanced stage in the cycle. The BPF has just published its latest survey of Business Conditions, which has revealed a further flattening of business confidence, first indicated in the mid 2014 survey. This is affecting expectations of sales turnover, profitability and investment intentions over the next 12 months. The current survey was conducted in January and February 2015 and attracted responses from 93 member firms.
Whist overall performance remains robust, the world is currently a very uncertain place and it’s hardly surprising that manufacturers are exercising cautious judgement and to some extent sitting on their hands. The international political situation is volatile, potentially impacting the supply of raw materials and energy sources and the outcome of the general election only adds to the haze.
Whilst two thirds of the firms surveyed were predicting an increase in UK sales turnover, only 37 percent predicted an increase in profitability, which is significantly down from 46 percent only one year ago and is the lowest we have seen in over two years.
The survey showed that the construction sector was performing extremely well with all pipes and windows firms surveyed predicting an increase in sales turnover over the next 12 months. Polymer distributors were, however, more pessimistic, with only 40 percent predicting an increase.
Despite conservative predictions of future profitability, the survey showed that 52 percent of firms were planning to increase staffing levels over the next 12 months; the highest ever recorded in our survey. The issue, however, is that firms simply cannot attract the right staff and once again nearly half of those surveyed stated they were having difficulty recruiting. This is something we are looking at tackling head on via our newly established ‘Skills and Education Committee’.
But, if there was ever a sector that exudes confidence, it is rotational moulding. On February 24th in Redditch, the BPF's Rotational Moulding Group organised its third annual seminar, this year focusing on the topic of troubleshooting. It attracted over 110 attendees from 50 firms. As there are only around 60 Rotational Moulders in the UK, the turnout for this event was exceptional.
In the last days, the BPF has reacted strongly to an article featured in 'The Times' newspaper (March 2) investigating "the chemicals in supermarket packaging". The piece was entitled ‘What Toxic Packaging Does to Your Healthy Food’. We said that the author of the article, Joanna Blythman, was misleading 'Time's readers in claiming that 'packaging chemicals' are not controlled. The fact is that plastics used in food packaging are subject to a whole battery of EU and national regulations, which are constantly being updated. Bisphenol A and phthalates are some of the most widely studied chemicals in the world and their continued safe use has been thoroughly risk assessed by both EU and international authorities. Developments in plastics packaging have been responsible for vast improvements in food hygiene over the last 50 years - without such packaging, food hygiene would likely regress to pre-war levels when the incidence of food poisoning was much higher. It was not uncommon before the days of durable and sealable packaging for rotting food, improperly packed, to cause worrying levels of fatality. We made the point that not only is plastics packaging safe, public health benefits from it.