The UK’s biggest exporting sector – chemical and pharmaceutical – has seen a swing to confidence for the first time in over a year.
Over the third quarter of 2016 more chem and pharma firms reported increases in sales volumes, exports, margins, and jobs than the number of companies reporting decreases, according to the Chemical Industries Association latest survey.
The survey also revealed an optimistic outlook for the near term, despite concern about the uncertainty of the UK’s future relationship with the European Union and its impact on investment.
The industry association has previously urged the government to negotiate tariff-free access to the Single Market.
It called for the availability of skilled people to be secured, the supply of competitive and secure energy and “a policy framework that encourages scientific progress” as three other priority areas that will help the sector thrive and attract investment after leaving the European Union.
Fears over higher energy and raw material costs are being offset by expectations that sales volumes and exports will continue to grow, with capital investment and research and development plans to remain unchanged from before the referendum vote.
It warned however 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.