Capital expenditure begins to slow down across UK process sectors
15 Jan 2000
A period of continuous growth of chemical industry capital expenditure has ended, according to the regular UK process plant market development survey from MBD*. Expenditure for 1998 increased over that in 1997, but only in nominal terms; in real terms, says MBD, the £2.1billion total represents a slight decline.
The picture seems to be widespread across many of the process markets. In food and drink, investment fell in 1997 and 1998; the water and sewerage industry reduced its spending in real terms to £896million, although the previous year had seen a 69 per cent increase. Petroleum refining saw a very marked fall of 12 per cent in 1998, following a a 39 per cent reduction in 1997.
The outlook for coming years remains gloomy, MBD predicts. `After strong levels of expenditure in the past few years, capital expenditure is expected to strongly decline in 2000 and stabilise at a much lower level than that expected for the coming year before recovering.' However, there is a bright spot on the horizon, says MBD: the constant cyclicality of the process industries will ensure that growth will return; the survey forecasts that a recovery will bring strong increases in chemical capex spending in 2003.
* For further information or a copy of the report, contact MBD, Premier House, 22 Deansgate, Manchester M3 1PH; tel 0161 839 2739; fax 0161 839 9320
