Latest UK chemical supply chain survey rev…

The Chemical Business Association (CBA), the voice of the chemical supply chain, has released results from its latest quarterly supply chain survey*. The survey, which is distributed to the Association’s extensive membership, contains responses from manufacturers and distributors, transport and logistics companies, as well as service providers from across the UK’s chemical supply chain.

The third-quarter results for 2025 paint a picture of cautious optimism, with improvements in sales and order books balanced by continuing cost pressures and regulatory challenges.

30% of respondents reported improving order books, up sharply from 18% in the same quarter last year. More than a third (36%) also reported higher sales over the past three months – nearly double the figure recorded in Q3 2024 (20%). Looking ahead, 24% of companies expect sales to rise in the coming months, indicating relatively steady momentum.

However, sales margins remain under pressure. Only 11% of respondents reported improvements, while 55% saw no change. The outlook for the next quarter remains challenging, with 37% expecting margins to worsen, mirroring the previous quarter’s sentiment.

Employment trends point to worrying shift towards reduced staffing levels. While the proportion of companies expecting to increase headcount has remained largely unchanged from the previous quarter, the number anticipating reductions has risen sharply to 28% – up from 20% in Q2 and just 13% in the same period last year. This growing expectation of job cuts highlights the increasing pressure facing businesses across the chemical supply chain.

Logistics costs remain a concern, though some relief is emerging. Half of respondents reported rising shipping costs, down from 77% in Q2. Yet issues with road haulage capacity in both the UK (11%) and EU (15%) have increased from last year’s 6% and 3%, respectively.

Global disruption also continues to influence the chemical supply chain. While fewer companies were affected by Red Sea/Suez route issues – 33% in Q3 versus 57% in Q2 – the impact of the Ukraine-Russia conflict has grown, affecting 27% of respondents compared with 16% for the same period last year.

Beyond supply and logistics, members highlighted concerns over ongoing Brexit-related regulatory challenges, particularly around UK REACH, as well as rising energy costs, legislative burdens, and increased inheritance tax – many CBA members are family-owned SMEs.

Tim Doggett, CEO of the CBA said: “The Q3 results are of great concern. While there are signs of improvement in order books and sales, many businesses continue to face mounting pressures. Factors such as the continued lack of clarity surrounding UK REACH continue to stifle growth and drive business overseas, while rising costs, from persistently high energy prices to increased employers’ National Insurance Contributions, are squeezing chemical supply chain companies, many of which are SMEs already operating on tight margins.

“The chemical industry employs over 150,000 people directly, with at least half a million more in the chemical supply chain, and the growing expectation of job cuts is particularly concerning. It reflects just how acute these pressures have become.”

He added: “People tend to overestimate the power of government to direct the economy. In reality, its influence is modest – it can create the conditions for growth, but not control it.

“As we approach the Autumn Budget, we urge the government to focus on measures that will keep the cost of doing business down while creating the conditions to encourage investment and growth. The chemical sector underpins almost every part of the UK economy, from food, manufacturing and healthcare to energy and construction, and its supply chain plays a critical role in driving jobs, innovation, and the UK’s long-term competitiveness.”

*The survey sample polled 47 members.