Brexit analysis predicts chemical industry contraction

A UK government economic analysis of the impact of leaving the EU indicates that chemicals will be the industry hit hardest by Brexit. The cross-Whitehall briefing, originally produced in January 2018, explores three trade scenarios, each with overall adverse effects on UK–Europe trade that are greater than any trade benefits gained elsewhere.

The analysis ranks the pharmaceutical and chemical industries as the first and third most dependent in the UK on trade with the EU, respectively. Consequently in the worst ‘no deal’ scenario, the gross value added (GVA) – a figure that reflects production within a country – from chemicals falls by 16%, compared with current levels. Even the best case scenario sees a 3% decline. While the analysis does not model the pharmaceutical industry specifically, GVA for ‘other manufacturing’ declines 8% in the worst case trade scenario and 1% in the best case.