BPF Post Referendum Survey Shows Industry is Cautious in the Face of Uncertain Business Conditions

The BPF’s latest Business Conditions Survey – which was circulated immediately following the result of the EU referendum vote – gives an insight into how the industry predicts the result of the recent referendum will affect the plastics industry.

The survey showed that despite the uncertainty, over half of the companies surveyed were predicting an increase in sales turnover. This is down from 63% in the previous survey but is nowhere near the 8% seen in January 2009 during the depths of the recent recession.

Companies were more cautious in their predictions on profitability, with only 20% predicting an increase (down from 32% in the previous survey), with many companies citing exchange rates and the subsequent impact on raw material prices as a reason. Despite these factors, more than half those surveyed were predicting that their profitability would stay the same.

With the value of the pound falling, when asked about predictions on export sales, 40% of respondents predicted an increase, with two thirds of them highlighting the weakness of the pound as a competitive advantage.

When asked about investment intentions, 27% stated that they plan to invest significantly (down from 38% six months ago). However, only 13% stated that they planned not to invest at all, with the majority of firms (63%) stating that the plan to “invest a little”. This shows that, despite the uncertain business environment, there is no sign that companies are going to stop investing in plant and equipment.

Investment intentions mirrored companies’ intentions in terms of recruitment, with a third of companies planning to increase their headcount over the next 12 months.

“What is clear from this survey is that our members are cautious about their economic performance in the short term,” commented Philip Law, Director General of the British Plastics Federation. “With so many unknowns and with the devaluation in the pound affecting the price of raw material 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”

The BPF’s latest Business Conditions Survey was conducted in June and July 2016 and was completed by 120 member firms.

ENDS

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Notes for editors:

The British Plastics Federation (BPF) is the UK trade association for the plastics industry – representing the whole supply chain including polymer producers, distributors, additives suppliers, machinery manufacturers, processors and recyclers.