UK chem firms less hopeful on prices but see output rising

20 March 2003 12:37  [Source: ICIS news]

LONDON (CNI)--The UK chemicals industry is less optimistic on prices and orders but sees a hike in output in the near future, according to the latest CBI (Confederation of British Industries) survey published Thursday.

The CBI's monthly industrial trends survey for March showed that only 9% believe average prices at which domestic orders are booked will rise over the next four months, compared with 22% in February. Fifty-eight percent think prices will stay the same, compared with 42% in February, and 33% believe prices will decline against 36% last time.

However, 37% of respondents see a rise in output volume over the next four months compared with 23% in February. Only 5% see volume going down, against 8% in February, and 58% think output will stay the same compared with 69% a month ago.

The chemical industry is less optimistic on short-term order prospects than a month ago. Some 33% of company respondents see their total orders as below normal, an 18 percentage point increase from February. Some 45% said their order books were normal this month, against 64% in February. The number of respondents who believe their total order book is above normal remained unchanged at 22%.

About 40% see their export orders as below normal, compared with 26% in January. Some 47% rate them as normal compared with 54% in February. Only 13% see export orders as above normal, down from 19% last time.

The survey also shows that 42% of chemical company respondents now consider that their present stock of finished goods to be more than adequate, compared with 31% in February. 

For the entire UK manufacturing sector, the CBI's survey indicated a step down in activity this quarter compared with the last one, with output expectations hitting their worst level for over a year. Weak orders, in particular for exports, are the main cause of the problem, said the CBI.

CBI chief economic adviser Ian McCafferty said: “With 42 000 job losses predicted this quarter and the hike in National Insurance Contributions (NIC) just around the corner, we hope next month’s Budget does not contain more cost-raising measures. Manufacturers desperately need a Budget that helps in the long term, particularly on investment.”

The survey was conducted between 20 February and 12 March, and 880 manufacturers responded.

By: Russell Ong
+44 208 652 3214

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