23 May 2024, 06:23
By Furniture News Nov 14, 2018

Difficult summer gives way to optimism, says BFM

The BFM has released its latest State of Trade data analysis, which shows a growth in confidence – but signs of a difficult summer were revealed in incidences of short-time working and redundancies.

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, states the BFM, the view of the general business situation compared to four 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 approaching the Christmas period.

The BFM knows from anecdotal information that the summer heatwave had a major adverse effect on trade for many businesses, and suspects 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 shorter working times. 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 four months – more than has been reported since June 2012.

Rising material input costs are still a concern, but nevertheless saw the lowest reported figure since October 2016. A balance of 41% reported having to pay more for foam in the last four 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 four 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, while Russia has emerged again as an export destination.

Jackie Bazeley, MD of the BFM, says: “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.

"The export data is also presented in a different way because of variations that can occur in each survey sample and also between sectors.”

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