The British chemical industry is in trouble

Recently, the British Chemical Industry Association (CIA) released the latest business survey results. The findings confirm that the UK chemical industry is facing serious difficulties in the current economic climate.

The CIA's third-quarter survey of its members showed the chemical industry's first quarterly decline in sales since the peak of the COVID-19 pandemic, with further declines expected in the last quarter of 2022 and early 2023. "In the third quarter alone, more than 40 percent of companies saw sales decline," said CIA CEO Steve Elliott. In addition to economic challenges, ongoing supply chain challenges are also causing order delays. On the demand side, inflation is close to 10% and is expected to rise in the coming months, with the cost of living crisis continuing to damper demand in the second half of 2022 and even into the first half of 2023."

Elliott says the government's Energy Bill rescue plan may protect businesses somewhat from soaring energy prices this winter, but the UK chemical industry is not out of the woods yet. The CIA will brief the administration on its review of the energy rescue plan, which is due to be released in early January 2023. "We need longer-term measures if we are to maintain the status quo and attract new investment and jobs," Elliott said.

According to Tom Warren, director of economics at the CIA, this quarter's survey data shows that energy costs, raw material costs, raw material shortages and Labour costs remain the top four challenges facing the UK chemical industry.