The UK’s chemical industry – singled out alongside steel in the Government’s new industrial strategy as underpinning all domestic manufacturing capability – continues to experience economic hardship.

The latest quarterly business survey conducted by the Chemical Industries Association showed that one third of Britain’s chemical companies experienced falls in sales, production levels and capacity utilisation. This performance is directly attributed to the cost of energy and international economic uncertainty.

Steve Elliott, Chief Executive of the Association, said:

“Our members have noted significant price erosion in key markets due to Chinese overcapacity. This fierce international competition, coupled with internationally uncompetitive industrial policies and input costs, is threatening the future of our domestic manufacturing sector. Numerous companies have announced closures, restructuring, strategic reviews or profit warnings over the past 2 years because investment is being re-directed to more competitive locations”. 

The Association’s Head of Economics, Michela Borra said:

“Our surveys clearly show more than two years of contraction for the industry with both investment and employment falling for chemical businesses. We are particularly worried that employment has been contracting for six consecutive quarters, likely due to long term market share losses”.

The survey also showed that expectations for Q3 and the next 12 months are downbeat. No vast improvements are expected for Q3 and despite expectation of higher sales in 12 months time, employee numbers are still expected to fall – signifying potential long term market share losses. Labour costs are expected to worsen for 70% of companies and weakening demand by almost 60%

Steve Elliott, concluded:

“the Government’s industrial strategy is good news for the country, but for many businesses implementation needs to be “yesterday”! What we now need is urgent action to back up these commitments – that’s action on energy cost relief, action on growth-hampering regulation such as the newly proposed landfill tax and action to secure the future of thousands of highly skilled jobs across the UK in regions that desperately need jobs. Those businesses are underpinning UK manufacturing every working day.

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 between June 25th and July 11th 2025. 50 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 41% 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.

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