Which will have more impact: the disruptive technologies affecting the lubricants business or macro-economic changes?
In June's View from the Bridge I commented that Brexit - Britain's referendum that could lead to exiting the European Union - might have a major impact. And so it has proved, even though the resulting vote to leave has yet to be implemented.
The UK has a new Prime Minister in Theresa May and a new cabinet. All signs are that Brexit will be implemented whatever the challenges. Whether it happens in reality depends on which analysts you believe - those that think it will happen and those that don't.
By the same token, the predictions of economic collapse in the UK and Europe as a result of Brexit are also receiving a mixed press. Certainly European bank shares have been hit badly, Sterling reached its lowest point in 30 years against the Dollar and uncertainty abounds. Yet the UK's manufacturing sector has seen a post-referendum bounce, despite a rise in costs, and commercial activity is increasing.
Yet, I remain concerned that the long-term consequences for the rest of Europe are at least as disturbing as they might be for the island nation! How confident, for example, can the EU be in tackling VW’s transgressions of the diesel regulations when it is considering its own survival?
Despite all of this, PMI - the key indicator of future economic outcomes - has moved into positive territory for many countries, the exceptions being France (48.3) and Italy (49.8). For example, the US number suggests ongoing growth with PMI at 52.9, India is at 52.6, similarly Vietnam 52.2 and China at 50.0.
Even the Russian Finance Ministry is warning that they may run out of funding if the oil price does not rise.
In our own sector, demand for lubricants is unlikely to change dramatically over the next couple of years, unless some of the disruptive technologies associated with electric and hybrid cars and new ownership patterns kick-in more quickly than currently expected.
That said, the longer term predicitions are looking positive, with new partnerships between OEMs and internet providers set to increase investment significantly in areas such as Autonomous Vehicles (AVs) and Electric Vehicles (EVs).
The pressure from the low oil price on the majors remains a boon to the smaller regional businesses, who can afford to expand, despite the slower global growth. There are also signs of continued long-term optimism with new production plants being planned.
The question of "What Oil?" still remains a challenge. It is not only the question of what oil is used for a particular piece of equipment, but what oil should producers be making? OATS has continued to work hard to help answer these questions, incorporating new capabilities in its own products and services that allow lubecos to identify the future trends that are emerging.
OATS' FUSiON Portal is now available as a web-based system which provides technical support applications. Combined with Product Manager, the new FUSiON platform is allowing enhanced precision and capability for managing product ranges and 24/7 support.
For those of you based in the UK we hope you will be able to join us at the UK Forum where we can update you in person on the changes you can benefit from.
To find out more about OATS product or the UK forum, simply contact OATS via e-mail or follow our updates on social media via Twitter, Facebook, LinkedIn and Google+.
Sebastian Crawshaw
Chairman