CIA: Brexit uncertainty “equals British disinvestment”

London – UK chemicals manufacturers have reported reductions in exports and employment over the last three months as the Brexit uncertainty continues.

And, the industry has “an unfavourable year ahead,” Chemical Industries Association (CIA) added in its latest quarterly survey of member companies.

Businesses are predicting a continued fall in exports and more companies foreseeing a decline in margins, according to the London-based industry body.

There was a first-quarter boost in UK chemicals and pharmaceutical production, fuelled by stockpiling to combat a no-deal Brexit, said Steve Elliott, CIA chief executive.

This trend, he said, reversed over the past three months amid renewed hope of a deal following the extension of the Brexit deadline to 31 Oct.

“However, as the odds continue to shorten on a no-deal outcome, we have the most uncertain business investment conditions for decades,” said Elliot.

The CIA boss emphasised the need for a tariff-free trading relationship with the EU, the avoidance of non-tariff barriers, regulatory consistency and unrestricted to access to skills.

Not achieving these, he said, 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,” stated Elliot. The sharp drop in capex – now halved compared to a year ago – is a further signal that businesses will not wait for politicians".

He concluded: “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.”