In the wake of an International Monetary Fund (IMF) prediction that the economy in the United Kingdom will contract by 0.6 percent in 2023, U.K-based trade group Chemical Industries Association (CIA) has released a survey indicating that the chemical industry saw a sharp decline in sales during the fourth quarter of 2022.
The chemical industry is one of the U.K.’s biggest manufacturing exporters, and it performed strongly during the COVID pandemic. However, the IMF predictions suggest the U.K. will be the weakest economy in the developed world through 2023, underperforming even sanctions-hit Russia.
More than 53 percent of respondents to the CIA’s business survey reported a fall in exports to the European Union in the final quarter of 2022, while 50 percent experienced falling demand from the domestic and non-EU market.
The CIA says that the challenging business climate for the country has been compounded by obstructive Government policy.
“We knew we were heading for challenging times, but the extent of contraction is worse than feared, CIA CEO Steve Elliott said. “As an industry we stand ready to deliver growth and deliver net zero [carbon emissions] for the U.K., but we cannot do that while the policy framework kills off any incentive for manufacturing investment in our country.
“When a typical U.K. chemical business not only has to report on 17 different climate change measures, before even trying to compete with a far more attractive US investment climate, driven by the Inflation Reduction Act, why would companies want to place money into the U.K.?” he asked.
On a brighter note, CIA members are expecting an upturn in the economic climate in H2 2023.
“The fact that more CIA members reported a fall in sales in between the third and fourth quarter of 2022 than did between the first and second quarter of 2020, which was the height of the pandemic, shows how challenging the end of last year was for chemical manufacturers,” Tom Warren, CIA’s head of economic, said. “Action is needed from the government in 2023 to convince international investors that the U.K. really is a place to do business.”