With an 8% market share, the UK is the EU’s fourth largest polymer importer and sixth in terms of exports to the rest of the EU with a 5% share, according to Eurostat. The UK accounted for 8% of the 56.6-tonne European plastics demand in 2016, according to Plastics Europe.
Industries such as automotive, construction and packaging consume more than five million tonnes of plastics a year, while Britain produces around 2.5 million tonnes.
Brexit could mean increased trade barriers, with plastics facing 6% tariffs under World Trade Organization terms. The value of the pound sterling fell on June 23, 2016, after a referendum in which a majority of Britons voted for the UK to withdraw from the bloc. This raised UK plastics prices, especially of polyethylene and polymers. If the pound remains weak, imported raw material prices will surge, causing UK plastic prices to rocket. The UK plastics sector could face capital cost increases, interest rate hikes and higher prices for machinery, which mostly comes from the Eurozone, making it less competitive.
The UK plastics industry plays a key role in UK economic growth and is the third largest manufacturing sector job provider. It employs around 166,600 workers, including 18,000 non-UK EU citizens, making it dependent on EU workers. The British Plastics Federation (BPF) estimates EU citizens account for half of temporary workers in the sector. A BPF survey found that since the referendum, UK chemical companies were struggling to find people to fill vacant posts. Brexit could force employers to increase wages and training costs to attract skilled workers.