Politics Home Article | “Reindustrialisation” can’t come quickly enough

The struggle for growth continues for Britain’s key foundation sector, the chemical industry.

In the latest business survey of members of the Chemical Industries Association (CIA), 44% of companies reported planned investment scheduled had been delayed, reduced or cancelled altogether.  

The survey which covered Quarter 2 of 2026, cited the continuing crippling cost of UK energy as the dominant issue preventing expansion to meet any uptick in both domestic and international demand.  The findings match official data showing that for the past 12-months the UK has had a persistent chemicals trade deficit as monthly imports exceed exports.

Chief Executive of the Association, Steve Elliott said: “as challenging as our international competitors and wholesale energy prices are, the huge frustration for UK chemical businesses is the extent to which UK energy and carbon policy is forcing them to compete for investment and sales with one hand tied behind their backs”.   Our new Prime Minister’s stated commitment to “reindustrialisation” can’t come quickly enough to enable the chemical industry to play its full part as a recognised foundation sector within the Government’s industrial strategy.    Hopefully that starts with a positive signal of intent on maximising our own domestic energy security and supply, with the continued development of North Sea oil and gas.  Action here will help secure the bridge to a cleaner, cheaper energy future through strengthening our industrial competitiveness, protecting jobs and reducing reliance on imports in an increasingly volatile world”

CIA Economist, Léa Charbonnier said “We are concerned about the knock-on impact to the wider economy from the unrelenting competitiveness challenges faced by UK chemical businesses. The latest available data show that, in 2023, the sector supplied £16 billion of essential products to other industries, with more than 44% of its output purchased by other manufacturing sectors. When the chemical industry struggles to invest and grow, the effects are felt well beyond our own sector.”

The survey also asked companies to give their experience of Brexit and of the Industrial Strategy, given their respective decade and one year anniversaries. On the strategy, almost 80% of businesses said there had been no noticeable impact on their business. Similarly, 82% believe Brexit has not worked for their business.

Nearly three quarters (73%) consider their UK operations less competitive than overseas sites, particularly compared with China, the United States and Southeast Asia.