Order books, sales and margins improve but supply chain issues getting 'acute', finds CBA survey

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8th October 2021 09:55 - Chemicals

Order books, sales and margins improve but supply chain issues getting 'acute': A quarterly survey of Chemical Business Association member companies has revealed insight into the sector, with order books and sales showing improvement, but the majority of respondents reporting issues with supply chains, which continue to worsen and are becoming 'acute'.

The survey polled 72 members of the Chemical Business Association and was conducted in June, and highlighted key supply chain issues.

Nine out of 10 members, made up of distributors, traders, warehouse operators, and logistics and transport companies said they have experienced rapidly rising shipping costs, with more than 8 in 10 members (82%) revealing they have experienced shortages of shipping containers.

Around three in five companies (62%) reported issues with UK haulage and capacity, while three-quarters (76%) highlighted the same issue with haulage in the EU. 

The CBA’s Supply Chain Trends Survey represents the independent chemical supply chain.  It's survey of members has been published since 2003 and aims to provide a snapshot of short-term trends in the UK’s chemical supply chain..

Respondents were asked about their order books and whether they have been 'better', 'worse' or 'the same' during the second quarter, with findings revealing a positive balance of +35% in June, up from March 2021 when it was +21%. 

Sales volumes had also improved according to the survey, reaching a positive balance of +43%, up from +26% in March, however looking ahead to the next quarter (June - September) the trend does not look as strong. Respondents expect to see a positive balance of +6%, which is a fall of 24% on March's survey.

Looking at sales margins, while in June they were positive (+11% an improvement of 39% since the last survey) future projections looked less so with a negative figure of -15% expected by respondents, compared to +6% in the previous quarter.

Tim Doggett, The Chemical Business Association’s Chief Executive, said, “The current business situation has improved over the last three months, but most member companies are reporting serious issues in the international supply chain resulting in significant delays, logistical gridlock, and massively increased shipping costs. This is compounded by the chronic shortage of HGV drivers aggravated by the combined impact of Brexit and Covid-19.”

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