UK chemicals industry continues recovery in second quarter

London - Figures released by the UK-based Chemical Industries Association (CIA) indicate sustained growth within the industry for the second quarter, building on gains seen in the first three months of 2024.

According to the London-based industry body, the trend marks “a significant recovery” for the UK chemicals industry, following 18 months of “severe decline.”

Challenges, however, remain for the sector including the cost of energy and raw materials, which are up to four times more expensive than competitor countries, noted CIA.

In its latest survey, the chemicals & pharma makers' association said that roughly half of its member companies reported higher sales, exports and production-levels.

“Capacity utilisation is increasing for 40% of respondents,” added Steve Elliott, the association’s chief executive, reviewing the feedback from respondents.

Optimism for the next three months and for the year ahead is also strengthening with sales expected to continue increasing by 60% of respondents.

“The [UK] government’s commitment to a new industrial strategy is very welcome news and urgent progress is needed here to sustain this growth,” said Elliott, while noting that geo-political tensions continue to impact the sector.

Also commenting, CIA economist Michela Borra said government figures showed that chemical-input prices were 7.3% higher than output prices.

This, she pointed out, “continues to put a strain on margins, which are in a tough place after 18 months of contracting sales for the sector.”