The British Plastics Federation’s (BPF) latest Business Conditions Survey, which was conducted in June and July 2017, indicates increased optimism within the plastics industry.
The survey, which is conducted twice per year, set a new record, with 80% of respondents predicting an increase in sales turnover over the next 12 months. Only 5% predicted a decrease.
The survey was released and presented at a BPF Council meeting, which took place on 12 July at the Bank of England and was attended by representatives from the Bank of England as well as the Department for Business, Energy & Industrial Strategy (BEIS). It showed that the number of companies predicting an increase in export sales also remained high at 62% — echoing the sentiment of the previous survey undertaken in January. 7% of companies predicted export sales will decrease, compared to just 1% in January.
Almost a third expected profitability to increase, a quarter expected it to decrease and 44% expected no change. Almost all companies expecting profitability to remain the same or fall mentioned that the weak pound was having a detrimental effect on the cost of raw material.
35% of companies aim to increase staffing levels over the next twelve months, although 57% report ongoing difficulties recruiting. Engineers are the hardest staff to recruit, followed by shop floor staff and technical managers.
When asked about investment intentions regarding plant and equipment, a third of companies reported they are planning to invest significantly. This number has been steadily increasing over the past year, suggesting that the confidence to make large investment decisions is returning. It had initially fallen slightly after the UK voted to leave the EU. Out of the companies that claimed Brexit had changed their investment decisions, the data shows that investment has mainly increased in the areas of overseas business development, automation and staff training.
BPF Membership Services Director Stephen Hunt comments:
The survey we undertook in January showed that the initial pessimism arising from Brexit had dissipated — and this survey continues this positive trend. With 80% of companies expecting sales turnover to increase, a new record has been set, suggesting growing optimism amongst the UK plastics industry despite Brexit negotiations revealing little so far about our future relationship with current trading partners.
The BPF’s latest Business Conditions Survey was conducted in June and July 2017 and was completed by 106 companies from amongst the BPF’s membership.