UK outlook: Chemical supply chain ends 2025 under pressure

Chemical supply chain businesses in the United Kingdom remain under significant strain, according to a new survey from the Chemical Business Association.

In the association’s Q4 2025 Chemical Supply Chain Trends Survey, which polled 43 members, 47% of respondents reported an upward move in order books, compared to 30% in the previous quarter and 18% a year earlier. And 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, CBA noted.

“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,” CBA CEO Tim Doggett said in a news release. “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.”

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, CBA added. 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,” Doggett said. “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.”

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-hauling capacity have risen sharply compared to the previous year, with 20% reporting issues in the U.K. (up from 3%) and 21% in the European Union (up from 11%), highlighting the wide range of factors U.K. 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.

“The U.K. chemical supply chain is resilient, but resilience alone is not enough to sustain this critical sector,” Doggett concluded. “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.”