Profit hopes spur chemical spend
22 Aug 2013
Increased hopes of rising profit margins in the chemicals sector is leading the majority of firms to maintain or increase their capital spending.
For the first time in two years, more companies in the sector are expecting margins to increase rather than decrease over the next 12 months, according to the latest survey by trade body the Chemical Industries Association (CIA).
This optimism meant that 83% of respondents to the association’s survey said they would maintain or enhance current levels of capital expenditure in the coming year.
The chemicals sector is the UK’s largest exporter by value, with a trade surplus of £5 billion.
Britain needs a strong chemical industry to enable any chance of sustained growth
CIA Chief Executive Steve Elliott
CIA Chief Executive Steve Elliott said the results of the survey showed the importance of the sector to the UK’s economic revival.
“The products and technologies made by our companies are essential to the automotive, aerospace and many other sectors,” said Elliot.
“Britain needs a strong chemical industry to enable any chance of sustained growth.”
In addition to optimism concerning profit margins, more than half of the chemical companies responding to the survey said they expected their sales to increase over the next year. Over 80% said they would also maintain or grow investment in research and development during that time.
The optimistic poll was published just one day after the UK government’s own survey of SME manufacturers in England found that half of the firms were planning to invest recent profits into new equipment and premises.
