Blog: No Market Uplift in Sight for U.K. Producers

Industry group the Chemical Industries Association (CIA; London) says despite scouring the economic landscape it sees no signs yet that business conditions across the U.K. chemicals sector are on the up. The recovery, when it comes will likely be in 2011 it says.

“Right now, [markets for] agchems, personal care and pharma are not as hot as they were,” says Steve Elliott, CEO for CIA.

U.K. corporate tax concessions in recent months have been curtailed and a £2,000 ($3,000) consumer subsidy for new car purchases has ended. If anything, this means that recovery among U.K. chemical producers could take even longer than it might have done, says Alan Eastwood, CIA’s economist.

CIA says it is pressing regulators to take the tough position of chemical companies into account on certain corporate tax concessions. “This message got home,” Elliott says.

The frustrating factor for the CIA team-as engaging as they are with the U.K.’s regulators-is that much U.K. policy development is on ice as the country prepares to vote for its next government.

The one bright light on the horizon is that some purchasers of chemicals are coming back to U.K. producers because they are purchasing according to product quality and not just price. The contamination issues relating to Chinese products, in particular, seem to have changed purchasing behaviour. 

Although CIA’s Alan Eastwood predicts the recovery in the U.K. “will be a long, slow grind,” at least one business trend is going the U.K.’s way. That the trend is all about seeking out quality also can only bode well for the sector in the long term.