The chemical industry is set to lead manufacturing’s recovery with improving prospects both at home and abroad.
In its latest quarterly report for the Institute for Manufacturing, the National Institute of Economic and Social Research predicts annual growth of 6% for the chemical industry over the next two years, compared with a general growth in manufacturing of 1.5% over the same period.
Analysts said recovery in European and Asian markets was fuelling the growth .
In a separate report, Oxford Economic Forecasting says pharmaceuticals are leading the chemicals recovery. It predicts 1.3% growth in 1999 and 3.5% in 2000 across the sector.
Economists at the Chemical Industries Association believe the OEF’s figures are more accurate. The CIA predicts growth of 1.5% this year and 2.5% next year, although this may be revised upwards to 3.3-3.5% in the near future.
Other manufacturing sectors continue to struggle in export markets because of the strong pound.
The engineering sector’s home turnover rose 5.4% in the quarter to August compared with the same period last year. Export turnover rose by only 0.4%. Profit margins continued to be depressed as manufacturers held down prices.