Key manufacturing exporter reports first growth in 2 years
Britain's chemical industry returns to growth.
Figures released by the Chemical Industries Association indicate a significant turnaround in the chemical sector – one of Britain’s biggest manufacturing export industries – showing signs of growth.
Chemical businesses - often seen as the ‘engine room’ of the British economy - have reported higher sales, higher production levels, and greater capacity utilisation during the first quarter of 2024 compared to the end of 2023. Looking ahead, optimism prevails, with over 50% of businesses anticipating higher sales and more than 40% expecting an increase in new orders, production levels, and capacity utilisation. However, it remains a very challenging environment with the sector having to tackle increasing costs for both labour and raw materials. More than 60% of businesses foresee labour costs worsening, while 47% anticipate increases in raw material prices.
Steve Elliott, Chief Executive of the Association, said:
"These latest results are positive, but the key question now is whether this marks the start of a sustained improvement. It has been a tough couple of years for the chemical industry." He continued, "An upturn in our more immediate commercial fortunes is, of course, very welcome, but it doesn't mask the longer-term challenge of establishing a more compelling UK investment case for chemicals – especially given that 4 in 10 companies have moved their production outside of the UK. We look forward to working with a new Government to address that urgent need."
Michela Borra, Economist at the Association, emphasised:
"Official government data reveals that current chemical production has declined by over a quarter since 2019. However, even if our latest survey shows signs of improvement, we need stronger Government support in terms of a more competitive policy and funding landscape, allied to the recovery of the European industrial sector. Without these, our ability to return to pre-pandemic operating capacity will be severely compromised”
