Pharmaceuticals bright spot in gloomy picture for chemical industry
Pharmaceuticals is the one sector in the chemicals industry that is doing well, according to the Chemical Industries Association (CIA), as it forecasts that the UK is unlikely to pull out of the recession until at least 2012.
Pharmaceuticals is the one sector in the chemicals industry that is doing well, according to the Chemical Industries Association (CIA), as it forecasts that the UK is unlikely to pull out of the recession until at least 2012.
Although there is a "glimpse of improvement" in the economy, says Alan Eastwood, economic adviser at the CIA, "the light at the end of the tunnel is still a long way away".
Positive signs are a competitive exchange rate and that VAT will revert to 17.5% next year, but unemployment is still rising and underlying demand weak. The Financial Times also predicts that more skeletons will come out of the banking sector, particularly in continental Europe.
Another negative for the chemical industries sector continues to be uncertainty over energy supplies, with no change expected until at least 2015. "Excluding pharmaceuticals, we won"t get back to our 2008 performance before 2012," said Eastwood.
CIA president Bob Tyler said the UK must improve its image so that chemical companies want to do business here and criticised the non-interventionist position of the government in supporting manufacturing during the economic crisis.
Diana Montgomery, commercial and policy director at the CIA, said the chemical industry is "highly innovative" and the UK is leading the way in r&d through excellent facilities at universities such as Southampton and Cambridge, which are helping to rebalance the economy towards high-value and new technology companies.