A survey conducted by the British Coatings Federation (BCF) in the second-half of October found that, despite the ongoing effects of the coronavirus pandemic and the continued lack of clarity on an EU trade deal, its members are more positive than they were in June. However, confidence is still weaker than average and far lower than pre-Brexit levels.

While decorative coatings have seen strong growth this year, sales in the printing inks and industrial coatings markets are down by between 15% and 20%, BCF said.

As was the case in June, business confidence differs dramatically between sector groups. With a large proportion of the UK workforce working from home or furloughed, the DIY sector has seen an increase in sales since March and decorative paint firms are expecting this to continue into 2021.

But printing inks manufacturers, making both packaging and publication inks, have had a much more subdued 2020.

This is said to reflect a continued decline in the publication sector as well as a sharp downturn in certain packaging areas, particularly in the hospitality sector and on-the-go packaging where the decline in business activity has had a major impact.

Year-to-date printing inks sales are down 18% and the outlook “remains very uncertain for next year”, BCF said.

Similarly, industrial coatings sales are down 17% for the year-to-date, and although a large proportion of firms are expecting sales to increase next year as UK manufacturing returns to more normal levels, many companies expect the recovery to be limited.

One major area of concern is employee numbers, with almost half of firms expecting redundancies in 2021 due to the double impact of Covid-19 and Brexit.

BCF chief executive Tom Bowtell told Printweek: “Our recent BCF member survey on business confidence found that almost half of participants were considering redundancies next year, which is a major concern.

“The furlough scheme extension to Q1 2021 is certainly very much welcomed, but whether this saves jobs will depend on how quickly the economy recovers.

“Once we are living in a society without coronavirus restrictions we will hopefully see much faster economic recovery.”

He added: “My personal view is that Brexit is about damage limitation and I don’t see an upside in demand due to a Brexit deal. However, if there is a trade deal it will likely minimise our losses on leaving the EU.

“A no deal will inevitably have a large impact on the printing inks industry. The price of printing inks and paper will be negatively impacted by tariffs, both for imported printing inks, and raw materials for UK based ink manufacturers, exacerbated by the likely devaluation of sterling.

“Even if there is a deal, printing ink manufacturers will still have a huge amount of additional bureaucracy such as new customs paperwork for every movement of product, and an additional separate set of chemical regulations for the UK which will inevitably add cost to UK produced printing inks and coatings.”

The BCF survey was conducted prior to the government’s second lockdown announcement for England but also before the recent vaccine breakthroughs were reported.

“The vaccine breakthroughs are a huge boost to both the printing ink manufacturers as well as the whole printing supply chain,” said Bowtell.

“Sales for both printing inks and industrial coatings are closely linked to general confidence and growth in the economy. Ultimately, the more prosperous the country is, the more activity there will be which in turn will stimulate printing and manufacturing in general.

“The roll out of the vaccine should allow mass participation events again and there is a large amount of print used for these, from football programmes to menus at bars and restaurants, helping the printing inks sector recover.

“At the same time, we have to be aware that some changes, like the growth of home working, will change some of the dynamics of the economy permanently.”