London – UK’s chemicals industry has posted continued growth for the fourth successive quarter despite a sharp rise in the cost of raw materials.
In its latest quarterly survey of members, the Chemical Industries Association (CIA) said 94% of businesses reported that total sales had stayed the same or increased in the second quarter of the year, compared to the previous quarter.
The industry, claimed to be the country’s leading exporter, saw a jump in global exports, with 47% of companies increasing their level of exports, said CIA in a 22 July statement.
Of those, 91% saw continuous or increased levels of exports to the EU, whilst all companies said their rest of the world exports were continuing at the same level or increasing.
Chemical manufacturers also saw strong growth in new orders, with 47% reporting an increase, and all other companies seeing no fall in new orders.
Looking ahead to the next quarter, companies remain optimistic with 94% saying exports would remain at current levels or increase.
On jobs, R&D spend and overall business investment, the outlook remains positive most companies expect all three measures to continue at current levels or increase.
“These numbers represent continued hard work by chemical businesses and their workforce,” said Steve Elliott, CEO of the association.
However, Elliott warned that a sharp rise in the cost of raw materials, as reported by 88% of companies, remained a serious challenge.
“Most of this increase is being borne out by manufacturers but the worry would be how sustainable it is for businesses to do that over a period of time,” Elliott noted.
Another worry, he said, is the logistics disruptions, including freight container shortage and border delays, that are affecting 44% of respondents.
Elliott warned that the challenges could "undo much of the progress made by the industry" and that a continuation of these problems will have a major impact on businesses.
“I hope we can quickly resolve the numerous factors driving raw material challenges and minimise Brexit-related border movement problems to enable an even stronger business performance,” he concluded.