Optimism abounds as vital sector flourishes

By Grimsby Telegraph | Posted: 21 Nov 2016

FOR the first time in over a year, chemical and pharmaceutical companies have seen growth across four key economic measures.

More companies in the third quarter of 2016 are reporting increases in sales volumes, exports, margins and jobs than the number of companies reporting decreases.

In the latest survey of companies who make up the UK's top export earning sector, the Chemical Industries Association also report an optimistic outlook for the near term, despite concern about the uncertainty of the UK's future relationship with Europe and its impact on investment.

Companies also have worries over higher energy and raw material costs. Sales volumes and exports will continue to grow, with capital investment and research and development plans to remain unchanged from before the referendum vote, but new pressure could come on the number of people the industry employs.

Steve Elliott, chief executive of the Chemical Industries Association, said: "Our latest survey of recent business performance and expectations shows the industry yet again adapting to new and significant challenges. Right across the UK our industry is responding to Brexit, taking the opportunity wherever possible – be it Europe, North America or Asia, to maximise the advantage from a more competitive sterling and pressing on with committed investment.

"With 80 per cent of companies expecting the level of sales to remain unchanged or grow; 85 per cent saying exports set to continue at current levels or grow; 67 per cent of companies reporting the number of jobs will remain unchanged or grow; 70 per cent saying capital expenditure will remain unchanged or grow and 97 per cent predicting R&D to remain unchanged or grow, we feel that there is every reason to be optimistic provided we can build the right new relationship with Europe."

On that the CIA has published a Brexit manifesto, with a special ten-strong team pulled together, with strong interests in this area.

Calum Maclean, chief executive of Synthomer, and Richard Carter, managing director of BASF UK, both operate plants on the South Bank, while Stuart Arnott, president of global operations at Hull-headquartered Croda International, is also on board.

Worth £6 billion to the regional economy alone, the process industry supports thousands of jobs and provides a basis for a major contracting community too.

Through the CIA the sector is calling for action in four key areas:

  • Tariff-free access to the single market
  • The availability of skilled people
  • The supply of competitive and secure energy
  • A policy framework that encourages scientific progress, leading to sustainable growth

After publishing the asks late last month, Mr Elliott addressed the House of Lords EU External Affairs Sub-Committee.

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