Business confidence among the UK’s plastics sector has improved, according to the British Plastics Federation (BPF, London / UK; www.bpf.co.uk) in its latest half-year survey of business conditions, compiled in June 2013. More than two thirds (67%) of UK plastics companies are expecting sales turnover to increase in the next twelve months compared with 55% in the last survey in January 2013. The reasons given for the improved sentiment were strong growth in home sales, new products and markets as well as more aggressive sales and marketing. Most are expecting no change in exports although 36% are anticipating export sales could rise over the next twelve months. The BPF says the most optimistic sector was the machinery and equipment suppliers, which possibly indicates an upturn in capital investment.

With regards to profitability, 41% of respondents are predicting a rise, which is up on the 31% in the previous study. Their optimism stems from lower raw material costs, tighter cost control, better efficiency, less waste and increasing competition. A third is expecting profitability to remain unchanged, while 15% are forecasting a decrease.

Staffing levels are not expected to change at 51% of companies responding. However, 15% are forecasting staff cuts, although this is less than the 22% recorded six months ago. An increase in staff is being considered by 28% of companies, notably machinery and equipment manufacturers as well as recyclers.

Over half (56%) of all plastic industry companies surveyed said productivity had increased by more than 5% since 2007. Polymer distributors and recyclers made the largest gains and market pressure was given as the single biggest influence on productivity levels. Other major factors were changes to product mix and manufacturing techniques followed by changes due to energy costs and capital equipment. The availability of skilled staff and the impact of regulations were bottom of the list.

Asked about the UK’s membership of the EU, 61% of companies believe the UK should stay in the EU but 72% want to secure improved terms of membership. BPF's director general, Peter Davis, said “Broadly our members want to stay in the EU but they strongly rejected the euro replacing the pound sterling with 74% saying ‘no’.”

The trade association represents all players in the plastics industry but is dominated by processors (67%). The rest, in descending order, are raw materials producers and distributors (10%), additives/masterbatch companies (9%), recyclers (9%), and machinery and equipment suppliers (5%).

The top three market sectors represented in the survey of 96 companies are construction, packaging and automotive. The rest are electrical/electronic, healthcare, general mechanical goods and furniture. See January 2013’s survey results at Plasteurope.com of 28.02.2013.

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BPF "Business Conditions Survey for the UK Plastics Industry" as PDF