In the latest survey of chemical and pharmaceutical business confidence carried out by the Chemical Industries Association, companies reported a good start to 2018 but remain concerned about the future.

In the first few months of this year, the sector is showing the fastest growth in sales volume in over three years, export volume growth at near record levels with continuing increases in capital and research & development expenditure.  Nearly 90% of companies reported either an increase in sales volume or retention of the volume compared to the end of 2017. Over 80% of companies said employee numbers were stable or growing. All respondents said they had increased or maintained investment in Research & Development and 93% reported a similar position for capital expenditure.

Steve Elliott, Chief Executive of the Association, said “This level of performance is good for our industry and good for our country. Those who lead and work in the chemical and pharmaceutical businesses that we represent are working to make sure we can meet increased expectations”.

In looking at the future, though, the industry reports concerns. While the survey showed opportunities in terms of new capacity and new products plus the lower value of sterling, half the companies see higher raw material costs and Brexit uncertainty as significant threats.

Steve Elliott said “I am concerned that a strong industrial performance could be cut short by two essentials for business investment. The cost of what we need to make our products (raw materials), although of course subject to markets, needs a UK strategy to  attract investment not just expenditure. While I am pleased about the Government’s recent announcement on shale, we need the industrial strategy to deliver. And on Brexit we have long repeated our concerns that the lack of certainty could not just freeze future investment levels but start to contribute to a decline. At the moment the message from our industry to the negotiators from the UK and from the EU is ‘you have a little time to get the future sorted, but not long’. Businesses will not wait forever to make investment decisions.”

ENDS

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For further information please contact Simon Marsh on 07951 389197 or [email protected].

• 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).