The chemical industry, the nation’s biggest manufacturing exporter, has said more companies in the past 3 months saw reductions in exports and lost jobs as the Brexit uncertainty continues.
In the latest quarterly business survey of member companies, the Chemical Industries Association (CIA) reported an unfavourable year ahead, with businesses predicting a continued fall in exports and more companies foreseeing a drop in margins.
CIA Chief Executive, Steve Elliott said “the first quarter boost in UK chemicals and pharmaceutical production, fuelled by stockpiling to combat a no-deal Brexit, fell back over the past three months amidst renewed hope of a deal following the announcement of the extension of our EU membership to the end of October. However, as the odds continue to shorten on a no-deal outcome, we have the most uncertain business investment conditions for decades”.
Elliott continued: “If we are to leave the European Union then let us quickly sort out the legal and economic framework in which businesses will operate. Since the day after the referendum we have pointed to the need for a tariff-free trading relationship with the European Union, the avoidance of non-tariff barriers, regulatory consistency and unrestricted to access to skills. Not achieving these would be further damaging for business and the money that could have been invested in the UK. The ongoing uncertainty is now almost as bad according to our survey. The sharp drop in capital expenditure – now halved compared to a year ago - is a further signal that businesses will not wait for politicians".
He concluded: “We all fully respect a democracy and political system but it is difficult to recall a time when politicians themselves have been so unsure on determining our future. Quite rightly, businesses have not just made plans for a no deal but are increasingly implementing those plans in the face of this vacuum. Some certainty allows business to make investment decisions for the long-term; right now I am not sure the UK can predict what is happening next week.”
For further information, please contact CIA's Simon Marsh on 07951 389197 or [email protected]
About the UK chemical industry
- The chemical and pharmaceutical industry adds £18 billion of value to the UK economy every year from total annual turnover of £50 billion.
- In addition to gross value added, the sector also contributes to the UK economy in its position at the head of many supply chains within manufacturing and its employment of a well remunerated, high-skilled workforce. We support 500,000 jobs both directly and indirectly Chemical manufacturing adds £9 billion in gross value added annually and pharmaceutical manufacturing £9 billion.
- The wider chemical and pharmaceutical sector (manufacturing plus distribution) is the largest exporter of manufactured goods with annual exports of over £50 billion. The export of motor vehicle, trailers and semi-trailers is the sector with next highest exports of £35 billion. Aerospace is £32 billion.
- 63% of companies in the sector export what they make to the world, the highest proportion of any goods manufacturing sector in the UK economy. 60% of our exports go to the European Union and 75% of our imports and raw materials come from the European Union.
- The sector’s level of business investment is £4.3 billion, compared to automotive £2.7 billion and aerospace £2.1 billion, while the expenditure on research & development is £5.0 billion (automotive £2.7 billion and aerospace £2.1 billion).
- The products and technologies of the Chemical industry are essential parts of medicines, food & drink, telecommunications, energy-saving, I.T, clothing and much more.
- For every tonne of Greenhouse Gas (GHG) emitted, our products and technologies enable over 2 tonnes of GHG emissions savings.