[ID] => 10861
[post_author] => 6150
[post_date] => 2019-04-10 09:12:02
[post_date_gmt] => 2019-04-10 08:12:02
[post_content] => The latest Supply Chain Trends Survey from the UK Chemical Business Association (CBA) reveals continued evidence that there is stock building within the chemical supply chain in preparation for the UK’s departure from the EU. While a growth in stocks can deliver some gains for distributors, particularly in the short term, it is predicted that it be followed by a period of negative sales growth in just a few months’ time.
The Supply Chain Trends Survey asks CBA member companies to provide information on order books, sales, sales margins and employment on a ‘better–worse–same’ basis. The responses are then analysed, ignoring responses answering ‘same’ and focusing on the positive or negative balances provided by the differences between ‘better–worse’ responses. This particular Supply Chain Trends Survey was conducted over two weeks between 25 March and 5 April 2019 and was compiled from the responses of 50 companies.
Peter Newport, CBA’s chief executive, says: “These results confirm anecdotal evidence from member companies. Given the continued Brexit uncertainty and the lack of any real clarity concerning the final outcome of the process, the UK chemical supply chain is taking measures to maintain supplies to the manufacturing and service companies relying on key chemical components for their products and processes.”
Members were first asked if their order books were better, worse or the same as during the previous three months. The results show that there was a significant increase, from a positive balance of 14 per cent in November 2018 to 34 per cent in the March-April survey.
Members were then asked about their sales margins. Again, when asked if current sales margins were better, worse or the same than the previous months, respondents said that margins have recovered strongly, moving from a negative balance of 11 per cent in November 2018 to a positive 22 per cent in the latest survey.
In terms of sales volumes, more positive news emerged. In November 2018 respondents stated an increase of 7 per cent, which has now accelerated to a massive 44 per cent for the March-April 2019 survey.
There was a positive – albeit weaker – response when it came to employment and training. The overall trend shows that businesses are still looking to employ and train staff, but they are remaining at historically low levels. The results for March-April 2019 show an 18 per cent increase, a marginal change from the 16 per cent reported in November 2018. When looking at training by itself, the positive numbers continue over the coming months. Businesses are reporting an expected increase of 28 per cent for higher levels of current training and 38 per cent for increased training levels in the next quarter. The indication is that businesses are looking to adapt their employees to handle any changes that may come their way with Brexit.
Despite all the positive news with apparent increases across the board, the survey indicates this is likely to be a short-term effect. Those responding to the surveys were also asked about their expectations for the upcoming three months, with very different results.
On the subject of sales volumes, the industry reported a drastic downturn on balances of 14 per cent over the next quarter. This is a sweeping change in fortune from the huge gains shown recently. Sales margins are also expected to return to negative, with a -12 per cent balance over the coming three months.
As with everything Brexit-related, speculation appears to be the rule. Anyone who still has the inner strength to keep track of the daily news cycle will know that the situation seems to change every few hours. To put it simply, no one knows with certainty what will happen, what the details will be or if it will actually happen. The world has already been subjected to delays in the Brexit deadline, with even more extensions having been suggested. It could well be the case that, if Brexit is delayed again, the quarterly projections will also be pushed back, and businesses may continue stockpiling materials on the scale they have been.
The results of these surveys indicate that businesses are playing it safe and planning for disruption in the UK. Short-term changes seem likely and businesses are stocking up to try and alleviate any difficulties in supply that might come their way. However, when it comes to the long-term ramifications, it is anyone’s guess. In an ever-evolving scenario such as Brexit, the indication is that the most adaptable businesses will be the ones to flourish. Caution, planning and flexibility are the dominant strategies.
[post_title] => CBA: Expect the worst
[post_status] => publish
[comment_status] => open
[ping_status] => open
[post_name] => survey-expect-the-worst
[post_modified] => 2019-04-10 09:13:49
[post_modified_gmt] => 2019-04-10 08:13:49
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=10861
[menu_order] => 0
[post_type] => post
[comment_count] => 0
[filter] => raw
CBA's latest Supply Chain Trends survey shows a business that is preparing for the worst and stocking up ahead of likely disruption, whenever Brexit happens