Column: Philip Law on the BPF's Business Conditions survey

In his latest column for BP&R, Philip Law, director-general at the British Plastics Federation, reflects on the federation’s first business conditions survey of 2023. 

With so many mixed signals abounding we were very keen to launch the BPF’s Business Conditions Survey in January to establish the best view we can on the business outlook for the plastics industry over 2023. 

In a quick poll we received responses from 72 firms, about half from processors and the other half evenly divided between suppliers of raw materials and equipment.The conclusion was a roughly stable forecast with some optimism for profitability. There was a decline in the number of firms expecting an increase in turnover over the next twelve months (49%) but equally an increase in those expecting the ‘status quo’. 

Specifically, there was a decline in the numbers expecting an increase in export sales, many citing ‘Brexit bureaucracy and EU customers buying more from EU suppliers. Nevertheless, there was a sharp increase in expectations of profitability from the low point of the last survey with some 35% of respondents forecasting an improvement. Some put this down to improvements made to plant and equipment whilst others cited lower material costs. Those on the pessimistic side blamed the savage increase in energy costs, in some instances five times more than they were two years ago. Capacity utilisation was expected to be around 77%, probably a median figure for the last ten years’ recorded expectations.

The percentage of firms expecting to increase staff levels fell to 35% with 46% expecting to maintain stable establishments. There appears to be a slight easing of difficulty in finding suitable staff with those having problems falling from 84% in the last survey to 70% in the latest. As ever engineers and shop floor personnel were the most difficult to find. Whilst there was a decline in companies ‘investing significantly’ there was a further increase to 57% of companies ‘investing a little’. 

Those not investing at all have remained a constant proportion in the mid-teens for the last decade. Clearly the government has been anxious to reduce its support for consumers and businesses to minimise the impact of energy costs but we were pleased to see much of the plastics industry included in the energy intensive business qualifying for further help, a product of an intensive BPF campaign conducted over the last three months. 

Bizarrely plastics recyclers were missed out in this and our work continues in a bid to secure their inclusion. In any event the basis on which assistance was perpetuated was rather complex and more questions are being asked. On the export front we hit the ground running, organising a stand at the PlastIndia Fair at the Pragati Maidan in New Delhi, February 1st – February 5th. With a Free Trade Agreement in negotiation between the UK and India, we were joined there by veteran exporter Meech International, Sandon Global, Astropol, Ashe Converting Equipment, Farrel Pomini, and Tinius Olsen. 

We received great feedback saying it was well worth their time attending, with one company commenting that if an FTO was signed with  India their business ‘would ‘explode there.’Meanwhile the BPF has exhibited  stands at  Southern Manufacturing , at Farnborough and the Packaging Innovations 2023 Fair at the NEC.

Finally, our congratulations go to Kaelan Hurrell of Berry, who has won the Polymer Industries Apprentice of the Year Award for 2022. This is an initiative organised by the BPF and the Worshipful Company of Horners to encourage the development of talent and the early emergence and identification of future plastics industry leaders.