The study by Imperial College London shows UK chemical companies closing at a rate that doubled from 2020 to 2025, with the high‑end sector hardest hit.

High electricity bills, rising compliance costs, ageing plants and competition from China are driving the decline. The sector once led in speciality chemicals—key to aerospace, biopharma, automotive and electronics—has now fallen 70% in contribution to the economy.

The pandemic exposed shortages of core pharmaceutical ingredients, and plant closures are forcing the UK to rely on foreign suppliers for defence‑grade reagents such as concentrated nitric acid, weakening strategic autonomy for missiles and munitions.

In May the government announced a £350mn resilience fund and trade measures, but industry leaders say more is needed. Thomas Aubrey warns that the contraction is a drag on macro growth, with output down almost 40% since 2020. The sector must act fast to protect against Chinese over‑production and secure its future.