In the latest survey of chemical and pharmaceutical businesses, companies reported a strong start to 2016 and an optimistic feeling about the future. The Chemical Industries Association quarterly business survey of member companies showed 95% saying sales volumes remained at previous levels or increased, 90% saying exports remained at previous levels or increased and 87% saying capital expenditure and research & development spending remained at previous levels or increased.

Looking to the year ahead companies were optimistic with 88% expecting to maintain or grow sales performance, 95% to maintain or grow exports, 87% to maintain or grow R&D spending and 85% to maintain or grow capital expenditure.

Commenting on the results, Steve Elliott Chief Executive of the Association said “We would never be complacent, but our member companies appear to be bucking the trend. The strong start to 2016 and the positive feelings about the year ahead are encouraging for our sector and for the UK economy. Despite official data which has reported low growth, poor manufacturing outlook and a trade deficit, the chemical and pharmaceutical sector is working hard to meet the needs of customers in the UK and across the globe”.

The survey also asked what companies saw as threats to their performance. Higher raw material and energy costs topped the list, with increased competition from China, shrinking markets, increasing costs of legislative compliance and uncertainty over the UK’s membership of the European Union all being highlighted.

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Notes

The chemical and pharmaceutical industry adds £15 billion of value to the UK economy every year from total annual turnover of around £50 billion. This represents around 10% of the value added by the whole of manufacturing.

The UK is a leading global chemical and pharmaceutical producer

The chemical and pharmaceutical sector is the UK’s largest manufacturing exporter with annual exports of close to £50 billion.

UK Chemical manufacturing productivity, as measured by output per hour worked, increased by 10% between 2008 and 2014, in contrast productivity increased by 2.5% in UK services sectors and increased by 5% for the whole of manufacturing in the same period.