Update: Brexit Insights
Brexit Referendum: Why Chemicals and Pharma Will Be Hit Hardest
A current survey by the Chemical Industries Association showed that 62% of companies voted to remain, with the remaining 38% declaring that their company had decided not to take a position. No business in the survey of CIA’s 93 member companies – representing approximately 70% of total UK chemical and pharmaceutical sales - said that leaving the EU would be in the best interests of their business.
Dr Tony W Bastock, OBE, Chairman of Contract Chemicals, said "The business success of many smaller chemicals companies in the UK is dependent on maintaining and growing their export penetration of EU markets. My own company, as with many others has over 80% of its business in the EU, facilitated by free access into the single market and by competitive raw materials from that market. Even the threat of Brexit has caused our customers to question placing future business with us; a full exit would certainly destabilise and damage our future growth and the jobs and innovation we support. "
Overall: One Percent Down Overnight
Should the UK leave the EU without negotiating an FTA, the turnover of British companies would contract by -1% per year on average, compared to a current predicted growth rate of +4% on average after 2017 if the UK remained in the EU, Euler Hermes believes.
This could further result in losses of up to £30bn or 8% of UK total goods exports, a gap which, even when offset by trade with Commonwealth countries, would take at least 10 years to fill. Under this scenario, the trade balance deficit, already at a record high level, would widen by £35bn to £180bn within 12 months of the formalisation of a UK exit from the EU.
EU Market Access Fundamental
Melvin Dawes, Managing Director Solvay UK, said "The European market is fundamental to our UK operations, we buy and sell products across Europe on a daily basis. We believe that the best way to secure future employment, investment and growth in our industry is for the UK to remain a member of the European Union”.