Continuing Optimism in UK Plastics sector, says BPF

The results of the British Plastic Federation’s January Business Conditions Survey have been published with  90 member companies participating, drawn from all parts of the UK Plastics Industry.

Peter Davis Director-General of the BPF said “The Plastics Industry is optimistic about 2012, but confidence is a little reduced compared to previous surveys.  This is hardly  surprising given the continuing Eurozone turmoil and poor consumer demand.”

56% of respondents are forecasting an increase in UK sales turnover compared to 66% in our June 2011 survey. This mirrors the uncertain outlook for consumer spending retail sales, jobs and continuing sluggishness in construction markets. 

Of those predicting an increase: 12% expected a turnover increase by 2 – 5%, 22% forecast an increase of 6 – 10%, 13% are anticipating rises of between 11 -20% and 9% expect rises of over 21%.
          
31% expected no growth and 5.5%  a decrease.  The most positive sectors were: Moulders; Polymer Distributors and Compounders and Recyclers who reported expanding markets; new business; recovery in the Automotive sector.

52% of respondents expected Export Sales to remain the same in 2012 compared to 39% in our survey a year ago.  With Western Europe the top Export Market for responding companies, the Eurozone turmoil has undoubtedly affected confidence alongside a slowdown in Asian markets such as China and Vietnam. 38% expected Export Sales to increase in 2012 and 7% predicted a decrease.

39% of respondents expected an increase in 2012 profitability which is up on 29% in the June survey.  Companies spoke of increased volume and efficiencies, a restoration of profit margins; improved cost management and ,increased productivity.

Peter Davis said “The UK plastics industry has taken decisive steps to introduce energy efficiency measures  and rationalise production.”

38% expected profitability to be unchanged and 14% predicted a decrease citing margin erosion; increased competition and increases in raw material costs.

45% of respondents expected no change in their staffing levels for 2012.  39% were planning to increase staff.  This is a little up on our June 2011 survey.

Of those planning to increase staff: 15%  will increase staff by  2 – 5%,  16%  are to grow by 6 – 10%, 7%  are anticipating an augmentation of staff of between 11 – 20% and just 1% will increase staff by 21% plus. In contrast 12% were planning to reduce staff.

We asked respondents about average pay settlements for 2012.  35% are planning to give no increase, 20% increases of between 1 – 2% and 35% rises of between 2.5 – 3%.

On companies' abilities to attract in much needed skills 27% were not recruiting. Whilst 50% were having no difficulty recruiting some 23% were experiencing problems.Of these latter companies 70% found Technical Managers hard to recruit.  Also difficult to get but much less so were: 'Other management', shop floor staff, apprentices and sales force personnel.

Peter Davis said “as current Technical Managers approach retirement we face a real difficulty in replacing them. This could compromise the potential for innovation.”

48% of all companies used Agency Workers.

Levels of investment was a key question.56% had capital investment plans for this year, down on the survey a year ago when 64% did.  The most positive companies planning investments were: Moulders, Pipe manufacturers, Packaging, Composites and Recycling companies.

44% were not planning any 2012 capital investments.

Companies were asked to rank significant factors putting UK Plastics at a competitive disadvantage

A high 84% said Energy Supply and Cost was the most significant factor holding them back.  This is substantially up on the 60% rating this had in our survey a year ago.

Peter Davis said “this reflects concern at escalating energy costs and growing fears that UK energy supply may not equal demand in a few years time.”

Other significant factors identified by respondents were, in order of priority: Environmental Taxes and Regulations; Employment Law; Carbon Reduction Taxes and Regulations and Support for Business Investment.

To download the full BPF Business Conditions Survey CLICK HERE for previous BPF Business Conditions Surveys CLICK HERE

ENDS

For all media enquiries, BPF logos and images, please contact Philip Law, on 0207 457 5011 or email [email protected]  

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.