The Chemical Industries Association undertakes a quarterly business survey of member companies. The data collected, and official data provided by the Office for National Statistics, is then presented back to members for further analysis. The economic report looks at the topics discussed by members in addition to the economic performance of the prior quarter and forecasts for the future.

The UK chemical industry’s performance against the wider economy:

  • In 2023 our sector contracted by 10.1% and as of May 2024 our output is 23.2% below pre-pandemic levels. Forecasts suggest that we will see further contraction in 2024 and just a marginal improvement in 2025.
  • Prices experienced by chemical producers have deflated for the 13th consecutive month. Output prices have fallen by 4.5% and input prices by 5.5%, with input prices falling quicker than output prices the gap between the two is narrowing even if input prices remain 6.8% higher than output prices.

graph 6.1

  • On official data, pay growth has slowed down but it continues to grow quicker than prices. For chemical employees the increases were particularly generous as in the three months to May 2024 they saw total pay (which includes bonuses) increase by 9.1% and regular pay by 7.2%.

Chemical Industry in Q4 2023 through our business survey:

  • Figures indicate sustained growth for Q2 2024, building on the positive performance seen in the first three months of the year. This marks a significant recovery following 18 months of severe decline.
  • Better operating conditions are expected to continue through Q3 with 30% of respondents expecting further increases in sales.

  • After changing the framing of challenges, ‘Energy costs’ has ranked number one concern for businesses, followed by ‘Weakening Demand’ and ‘Raw Materials Costs’. Issues surrounding demand remain focal for over a third of respondents. Overall, issues regarding the labour market, freight, and net zero are expected to worsen throughout the year.

graph 9

 

About CIA Economic Reports

At the CIA we undertake a quarterly business survey of our membership to identify arising trends, gather consensus and evaluate industry feel regarding arising issues to communicate with government and the media on operating conditions for chemical manufacturers across the quarter. 

Results from the business survey are discussed in the quarterly economic report. The data collected, and official data provided by the Office for National Statistics, is presented back to members for further analysis. A comprehensive economic report is then published, looking in detail at the topics discussed by members, in addition to the economic performance of the prior quarter and forecasts for the future.

For more information contact CIA Economist Michela Borra at borram@cia.org.uk 

 

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