Figures released by the Chemical Industries Association (CIA) show a sector under mounting strain, with the latest business survey pointing to continued weak demand, falling employment and the growing likelihood of further site closures. The findings underline the deep challenges facing the UK’s chemical industry as it enters 2026, following several years of declining production and sustained competitive pressures.

 

With 25 site closures over the past 5 years, Britain’s once dominant chemical industry is in the fight of its life, with many companies facing the existential threat of continued weak demand and hostile government policy.

That’s the view emerging yet again from the latest quarterly business survey conducted by the Chemical Industries Association (CIA), with 2026 showing little sign of pressure easing on UK chemical businesses.

The CIA’s survey showed that in the last 3 months of 2025, jobs have fallen as 38% of companies reported a decrease in employee numbers. Sales have fallen for 37% of companies. Overall 87% of companies expect at least a year of ‘weak business’.

One of the biggest pressures on the sector has been the crippling cost of energy - needed to not only run factories but also as a feedstock, underpinning production processes. In the UK these costs continue to be as much as four times higher than in some key competitor countries – with Government policy significantly reinforcing that differential. Add to that an unsustainable timeline for reducing carbon emissions and long-standing uncertainty over post-Brexit UK chemicals policy, all of which leaves Britain as an increasingly uncompetitive location in which to make and sell chemicals.

Reflecting on the latest survey outcomes, Steve Elliott, Chief Executive of the Association said:

“It saddens me to say that these results are totally unsurprising, coming as they do on the back of a near 40% fall in UK chemical production between 2021 and 2024, alongside a similar percentage fall in the sector’s carbon emissions. That’s not coincidence; it’s the consequence of successive government failures to support UK manufacturing. From the undemocratic 2019 political decision to pursue net zero by 2050, regardless of the consequences, to the current drive to reduce carbon in a timeline increasingly out of step with the UK’s key competitors, we are witnessing decarbonisation through deindustrialisation. That’s not thoughtful policy, that’s economic vandalism.”

He continued, “The latest performance figures mean it will be very surprising if we do not see more businesses close their doors”. “The Government’s own Industrial Strategy recognises the chemical industry as a key foundational sector, delivering huge economic and social benefit across the country, underpinning our critical national infrastructure and supplying essential raw materials to growth sectors such as clean energy, defence, life sciences and wider advanced manufacturing. Fine words, but it’s action that is needed, and needed now if we want a successful Industrial Strategy, let alone a competitive UK chemical industry.”

Elliott concluded: “The huge irony here is that net zero can only be achieved through the products of the chemical industry and the skills of its people. All we are asking for is the ability to compete with at least one hand not tied behind our backs – and that’s not about handouts, it’s about business-supportive Government policy to enable a competitive transition to net zero. Give us the policy framework to compete around the globe and we’ll give the country the products and solutions of the future.”

ENDS

 

NOTES TO EDITOR

For any further information and/or to speak to Steve please contact Simon Marsh at MarshS@cia.org.uk, 07951 389197.

  • 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 or defence equipment, the chemical industry is truly the “industry of industries”
  • The Government’s 2025 industrial strategy said “at the core of Advanced Manufacturing underpinning all domestic manufacturing.”
  • 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 135 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 25% more than other manufacturing industries and almost 40% 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 £70 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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