BPF meeting provides Bank of England with “extraordinarily valuable insight”

Bank of England officials have described a recent meeting held with the British Plastics Federation (BPF) as providing an “extraordinary valuable insight” into the UK’s manufacturing, distribution and retailing activities.

Peter Andrews the Bank’s Greater London Agent, made the comments after he and Monetary Policy Committee member, Dr Martin Weale, hosted the BPF’s annual council meeting on 15th July.

During the meeting, the BPF reported a strong performance from the UK plastics industry, based on the results of its latest Business Conditions Survey conducted over June and July.

This revealed signs of further improvement in both revenue growth and profitability, with both UK and export markets contributing to the uplift.

BPF Council members reported in detail that among the strongest sectors were manufacturers of technical components, benefiting from the re-shoring of existing projects from China and from the growing preference of UK design houses to work with UK manufacturers.

Investment in plant and equipment was being facilitated by the strong pound and is being maintained at a high level, the BPF reported.

The automotive sector, it added, was a major contributor to growth. There had been recent major investments by Jaguar Land Rover, Ford and Vauxhall and sales of British built cars are at the highest level for five years.

Companies supplying the building market reported that the long-term trend is positive. Infrastructure has performed well, said the BPF members, and new housing starts are in the process of recovering to pre 2008-9 levels. The industry is hopeful that the package of planning reforms, recently announced, will serve to give a further boost.

In packaging markets, levels of innovation by UK firms are very high with “considerable progress” registered in the lightweighting of packs. 

BPF challenged the official picture of relatively low productivity for British manufacturing, questioning the criteria used. They pointed out that firms in the UK plastics industry, particularly those involved in high volume manufacture, had world-beating levels of productivity.

The BPF painted a mixed picture for export markets emerged with exporters involved in construction markets in China and Brazil providing pessimistic testimony. However, high-tech applications in China were performing strongly. Several segments of the EU market were reported as promising.

“Business confidence in the UK plastics sector is at a high level. We are extremely well positioned to meet the challenges of the emerging 'circular economy' and our growing recycling achievements will be central to this,” commented David Hall, BPF President at the meeting.