Our economic report has two sections. The first part is a CIA analysis of government statistical data, this section assesses the UK chemical industry’s performance against that of the wider economy. The second section presents the results and further analysis of our quarterly industry survey. Our Q1 2024 Business Survey took place between the 8th and the 19th of April and it received entries from 50 chemical companies.

Q1 2024 was the first quarter of expansion in 18 months. Sales, production levels, and capacity utilisation expanded for 50% of respondents and were all above expectations made in Q4 2023. Slower moving variables remain in contractionary territory especially employment which is expected to continue to decrease by 28% of respondents. The Red Sea crisis has impacted the cost of trading as all respondents reported them to have increased or remained the same since Q4 2023. 

Better operating conditions are expected to continue through Q2 as over 50% of respondents expect higher sales, and 40% higher production levels, new orders, and capacity utilisation. Further contractions are expected for slower-moving variables, especially employee numbers, likely due to the production capacity lost during the past two years. The cost of trade is not expected to decrease and neither are raw materials prices. Expectations over the next 12 months are also optimistic despite ambiguity regarding employee numbers which are expected to decrease by a quarter of respondents and another quarter expected them to increase. 

The main three challenges this quarter were ‘weakening demand’, ‘ labour cost increases’, and ‘raw material price increases’. Labour, raw material, and freight-related issues are expected to worsen in the short term, whilst energy to further stabilise.


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