The CIA released the latest economic report looking at the topics discussed by members in addition to the economic performance of the prior quarter and forecasts for the future. 

Chemical Industries Association’s Fourth Quarter Economic Report

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. Here are some of the key findings:

Chemical Industry in 2023 through ONS data:

  • Chemical output fell by 4.0% from January to November 2023 and it is currently 20.9% below pre-pandemic level. The reason behind falling output was weak demand from manufacturing industries that use chemicals as input for production. Forecasts suggest that 2024 will be a transition year leading to a more positive 2025 and 2026.
  • Chemical prices have deflated for the eight consecutive months due to lower energy prices and weakening demand. Input prices have been higher than output prices for almost two years and their gap has almost doubled throughout 2023.

Chemical Industry in Q4 2023 through our business survey

  • Q4 2023 marked the sixth consecutive quarter of contraction for the industry as sales fell quicker than in Q3. Amid improvements of new orders, capacity utilisation, EU exports, and margins offer a glimmer of hope as we enter 2024. Expectations over Q1 are more positive with over a third of respondents expecting to see higher sales, new orders, production levels, and capacity utilisation than in Q4 2023.
  • The main three challenges this quarter were ‘weakening demand’, ‘ labour cost increases’, and ‘labour shortages’. Labour and freight related issues are expected to worsen in the short-term, whilst raw materials’ ones to marginally improve. Whilst ‘energy cost increases’ was ranked fourth, members are vocal that current levels are uncompetitive by international standards.

Read our Press Release 

 

For any further information about the survey or to speak to CIA please contact Simon at marshs@cia.org.uk 07951 389197 or Diana at tamayod@cia.org.uk 07885 831615.

  • The Association’s survey was carried out at the end of January, with 50 chemical businesses across the UK reporting.
  • Businesses who make chemical products and solutions are integral to something like 96% of all manufactured goods.  Whether it is ingredients for food and medicines; paints and coatings for cars and planes or materials for mobile phones and electric vehicle batteries, the chemical industry is truly the “industry of industries” – also playing a critical role in the nation’s response to Covid-19 through its supply of hand sanitiser, PPE and vaccine ingredients.
  • Chemical businesses are located throughout the UK, with many of them clustered together in the North East of England, North West of England and Central Scotland.  These factories and laboratories, operated by a highly trained and skilled workforce, make a significant contribution towards the UK’s productivity performance.  
  • Roughly 140 thousand people are employed in the sector and nearly half a million have roles that are dependent on the sector. Chemical workers typically earn around 21% more than other manufacturing industries and almost 27% more than the average worker.
  • From Runcorn to the Humber Bank; from Teesside to Grangemouth, chemical businesses and their employees right across the country are essential to the Government’s levelling-up agenda.
  • We are the country’s second biggest manufacturing exporters, sending goods to the value of more than £60 billion to other countries. The EU represents our most important market, but we continue to work closely with Government to inform and secure UK trade deals with other key chemical markets such as Japan and the USA

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