The BFM has released its latest state of Trade data analysis which shows confidence growing but signs of a difficult summer revealed in incidences of short time working and redundancies.
The survey looked at the 4 month period to October and expectations as we move towards Christmas and into the New Year.
The overall state of trade compared to last year’s data continues to be seen as less than desirable, but now by a far smaller amount than in the previous two surveys. In fact, the view of the general business situation compared to 4 months ago is seen as more positive by a significant balance.
Both new order intake and the volume of output improved far more than was predicted in June this year, with more than half of the respondents expecting gains in both orders and output as we approach the Christmas period.
The BFM know from anecdotal information that the summer heatwave had a major adverse effect on trade for many businesses and suspect that much of the improvement shown in this survey came in the latter period. This initial difficult trading period is reflected in the number of companies reporting having to implement short time working. More than one third reported having to reduce working hours, which is the largest number since June 2010. Also, 22% of companies reported that redundancies were made in the last 4 months. This is more than has been reported since June 2012.
Rising material input costs are still a concern but nevertheless has the lowest reported figure since October 2016. A balance of 41% reported having to pay more for foam in the last 4 months, which is surprising since a principal chemical in its manufacture, TDI, has fallen sharply in price this year. Topping the list of price increases in terms of the numbers reporting them, were timber, glass, board and fittings.
A portion of companies increased their product prices in the last 4 months but profit margins remain under pressure with a quarter reporting reduced margins.
Half of the respondent businesses exported products and the median level jumped from 5% to 10% of total sales turnover, and Russia has emerged again as an export destination. Mike Dimond, Director of Membership Affairs, said, 'This rise in the median level is great news but it may reflect the particular survey sample, so it will be interesting to see if this trend is repeated in future surveys, as will be the case too with Russia'.
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