Chemical businesses across the UK have voiced their need for a strong European Union economy to their manufacturing operations.
The latest Chemical Industries Association (CIA) survey of member companies, showed that total sales volumes and export volumes continued to gain.
The expectations for export growth remained high; 50% of companies expect exports to increase over the next twelve months with only 6% expecting a decrease.
A third of companies saw the expanding European economy as an opportunity over the next twelve months. The European Union is the sector’s biggest export market with 60% of exports going to the EU.
Further increases in both capital expenditure and R&D spending are predicted in the survey with employee numbers expected to rise at the fastest rate since early 2015.
41% of companies expect to increase capital expenditure over the next twelve months with only 9% expecting to lower spending. In addition, no company expects to reduce R&D spending in the next twelve months while 21% will increase R&D spending.
Chief Executive of the Association Steve Elliott said “In spite of the positive results, the survey also showed that trading uncertainty was already weighing down exports and potential increases in regulatory costs was a big concern for chemical businesses.
“We, therefore, continue to urge the Government to provide clarity over the future trading and regulatory relationship with the European Union to ensure frictionless tariff free trade, regulatory consistency and access to skilled people are essential to maintaining the growth of the chemical sector across the UK.
“A strong EU economic performance benefits the UK if we can get the relationship right after we leave.”
The CIA has criticised the UK Government for making the full transition to Brexit unnecessarily complex.
Steve Elliott was speaking after publication of the Government’s plans for a customs union
He said: “Cross-Government acceptance of the need for a transition period is very much welcomed by our sector and many others – it’s a priority that CIA has been highlighting for some time now.
“Surely, however, the best way to guarantee no adverse disruption to business and trade during a transition period, and to guarantee only one adjustment before reaching a final agreement with the EU, is to seek to retain our existing membership of the single market and customs union, rather than pursue a ‘close association’ with the customs union that still leaves key questions around regulatory continuity, tariff and non-tariff barrier impacts.”