Britain’s once dominant chemical industry is continuing to suffer.
The latest business survey of members of the Chemical Industries Association shows that 60% of chemical businesses reported falling sales with a further 20% seeing no growth. More worrying news amidst a number of recent closure and strategic review announcements.
Steve Elliott Chief Executive of the Association said:
“We are experiencing the most challenging of times in terms of uncompetitive input costs, suppressed demand and, it has to be said, a manufacturing-unfriendly policy and regulatory environment. All with no immediate end in sight.
Every chemical business across the UK is paying more for its energy than competitors elsewhere – as much as four hundred percent higher than in America – with the added challenge of a hugely ambitious net zero transition timeline and hostile policy agenda. For some parts of the UK chemical industry this increasing lack of competitiveness is simply not sustainable, with announcements of site closures and strategic reviews on the rise. All of this leaves our ability to deliver essential materials for our country’s critical national infrastructure – be it energy, health, food or defence – increasingly at risk, not to mention our key value chain role in underpinning other growth sectors such as aerospace and automotive. If the Government wants to have a chemical industry – every major economy in the world has one – then we need urgent action to address these unsustainable costs and unsupportive policies.”
Michela Borra, Head of Economics at CIA said:
“Our Q4 2024 Business survey results come off the back of data released from the Office for National Statistics showing that chemical output has reached the lowest level in over a decade. This coupled with expectations of worsening on the energy and labour cost side indicates another challenging year for our members. Our survey has also highlighted that the main three current challenges for businesses are the cost of energy and labour, alongside weakening demand, with less than 10% of companies expecting these conditions to ease through 2025.”
Elliott added:
“Whilst it’s good to see the Government starting to address some of our country’s longer-term infrastructure needs, we need meaningful action now to enable chemical businesses across the UK to play their essential role in driving much needed economic growth. In an increasingly uncertain world, and with 96% of all manufactured goods dependent on chemistry, it is surely better to make in Britain, rather than break in Britain”.
For any further information please contact Simon Marsh at MarshS@cia.org.uk, 07951 389197 or Diana Tamayo at TamayoD@cia.org.uk, 07885831615.
- 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.
- The Association’s Project 2035 work shows how to turn the current, challenging situation around
- Our survey was conducted between the 8th January and 22nd January 2025. 42 companies of all sizes from across the UK responded.
- 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 biggest market, but we continue to work closely with Government to inform and secure UK trade deals with other key chemical markets such as India and the USA.
