CBA Trends Survey: Chemical sector ends 20…

UK chemical supply chain businesses remain under significant strain, according to the latest Quarterly Chemical Supply Chain Trends Survey* from the Chemical Business Association (CBA).

The survey – which has been providing valuable insights for over 14 years – is distributed to the Association’s extensive membership and gathers responses from manufacturers and distributors, transport and logistics companies, and service providers from across the UK’s chemical supply chain.

In the latest survey, covering Q4 2025, nearly 47% of respondents reported an upward move in order books, compared to 30% in the previous quarter and 18% a year earlier. 37% also reported higher sales over the previous three months, up from 20% in Q3 2025. However, these increases follow a sustained period of contraction and subdued activity.

“While there might be some modest signs of improvement in our latest trends survey, the reality is that the sector continues to operate from a low base following a prolonged period of disruption and uncertainty. Many businesses are working extremely hard simply to hold their ground. Against this backdrop, even small gains risk overstating the underlying health of the market,” explained Tim Doggett, CEO of the CBA.

Looking ahead, only a third of companies (33%) expect sales to rise in the coming months, suggesting cautious expectations rather than strong forward momentum.

Profitability remains a major concern. Just 12% of respondents reported improved sales margins, while 56% saw no change. For the coming quarter, 38% expect margins to shrink – unchanged from Q3 – underlining ongoing cost pressures.

“Chemicals are a Critical National Infrastructure sector, yet it remains vulnerable and exposed. Margins remain under severe pressure, costs keep rising and regulatory uncertainty and inertia, particularly around UK REACH, continue to weigh heavily on business opportunities and investment decisions. Urgent action is needed to address these issues,” Doggett added.

While employment intentions may appear to be less negative than in the previous quarter – in Q3 2025, 28% of companies expected to reduce staffing levels, falling to 14% in Q4 – businesses continue to remain cautious when it comes to recruitment, amid persistent uncertainty and rising costs. Only 19% have plans to increase employment in the coming months.

Logistics factors also continue to add pressure. Concerns around road haulage capacity have risen sharply compared to the previous year, with 20% reporting issues in the UK (up from 3%) and 21% in the EU (up from 11%), highlighting the wide range of factors that UK businesses continue to face.

These findings align with increasingly urgent warnings from across Europe about the perilous state of the chemical industry, as it grapples with global competition, weaker demand, higher energy costs, production declines and stifling regulatory burdens.

Doggett concluded: “The UK chemical supply chain is resilient, but resilience alone is not enough to sustain this critical sector. If Government is serious about growth, warm and aspirational words won’t suffice. I reiterate what I said following the findings of our recent post-Budget survey – this is yet another wake-up call that Government must get a grip and create the best possible environment for business and a credible long-term industrial framework. Our members, and the chemical industry at large, cannot invest, expand or successfully compete against this continued backdrop of U-turns and uncertainty.”

*The survey sample polled 43 members.