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Mon, 22 July 2024

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Chemical Industries Association Launches Manifesto in Parliament

Chemical Industries Association

2 min read Partner content

Chemical companies across the UK are continuing to face difficult trading conditions. In the latest survey of member companies of the Chemical Industries Association, over 50 different businesses reported a sixth consecutive quarter of contraction.

Falling sales, production levels, and capacity utilisation featured heavily. However, looking forward, there is a glimmer of hope, with the majority of businesses thinking the worst is over and that new orders and exports are predicted to improve. That said, a more sustained recovery is not anticipated before the end of the year.

The survey – which covered trading conditions in Q4 2023 as well as a forward look - highlighted weakening demand, labour cost increases, and skills shortages as the three main challenges for the industry, with growing concern over freight price increases and shortages. Energy costs were not in the current top three, but they are still a huge concern for the sector, with current prices at double pre-energy crisis levels and internationally uncompetitive.

On the people challenges, Michela Borra, the Association’s Economist, said, “Future expectations of contracting employment and of higher labour costs suggest that retention costs for chemical manufacturers are projected to increase as the sector continues to be affected by skills shortages.”

Steve Elliott, Chief Executive of the Association, said, “There is some hope, but we must tackle the policy agenda featured in our recently launched manifesto if the country is to retain a thriving chemical industry. Our businesses can do so much for this country in terms of tackling climate change, providing well-paid jobs in regions where they are needed most and boosting UK exports. However, we must improve the policy framework we are asking industry to operate under. It is a major worry that a third of companies in our survey said cost management and survival will shape their approach in 2024. I know we can secure better times, but we really don’t have long to establish confidence in the UK for chemical businesses and their investors”.

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