The BPF has been conducting the survey biannually since 2009, providing a valuable long-term view of business sentiment and investment trends across the sector. It was completed by 93 member companies from all sectors, including raw materials companies, processors, equipment suppliers and recyclers.
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SALES REMAIN UNDER PRESSURE, BUT THE OUTLOOK IS STABILISING
Overall, sales in January 2026 were down by an average of 3.5% compared with the same period in 2025. However, this headline figure masks a varied picture across the industry. For example, equipment suppliers reported an average growth of +3.5% and pipe manufacturers reported growth of +8%, reflecting stronger conditions in certain member groups.
While fewer companies are predicting sales growth than six months ago, the sharp decline in optimism seen since mid-2024 appears to be easing. Interestingly, the survey shows that historically, general elections have had a noticeable impact on sentiment. The increase in optimism (and subsequent decline!) seen in June 2024 coincided with the general election, which took place a week after the survey closed. Previous elections have shown a similar pattern of sharp sentiment increases followed by a decrease post-election.
The surge in optimism seen during 2021 and 2022 was driven largely by exceptional demand linked to the pandemic, particularly from healthcare markets (although other sectors performed well during this time too). During that period, the proportion of BPF members supplying healthcare customers increased from an average of 31% pre-pandemic to nearly 60% in January 2022. Despite the difficult trading environment, there are early signs of improvement. One equipment supplier reported that “2025 was poor due to economic and government pressures, but 2026 has already started on a more positive note”, while others pointed to improving housing market conditions and increasing economic confidence.
PROFIT MARGINS ARE BEGINNING TO STABILISE
Whilst the sector experienced a significant increase in sales during the pandemic, this was accompanied by an erosion in profit margins, driven by a combination of sharply rising energy costs, sustained wage inflation and increases in raw material prices. Profitability began to recover between 2023 and 2024 as cost pressures eased and selling prices adjusted. However, this recovery proved short-lived, and margins came under renewed pressure over the past year. Encouragingly, the latest survey suggests that while profit margins have not yet fully recovered, the rate of decline has slowed significantly. This indicates that the prolonged downward trend may now be stabilising, providing early signs that the worst of the margin compression may be behind us.
INVESTMENT REMAINS CAUTIOUS, BUT THE AUTOMATION TREND CONTINUES
Investment intentions in plant and equipment remain cautious, reflecting ongoing uncertainty. However, it’s worth noting that, historically, investment tends to lag changes in sales optimism as companies wait for sustained improvement before committing capital. Of those companies that provided reasons for investment in plant and equipment, it was often to drive efficiency and become more resilient. Several companies stated they were investing in solar energy generation to reduce operating costs, while automation remains a major priority for others. This is backed up by data from our Moulders Benchmarking Survey, showing that the proportion of machines fitted with robotic automation has increased from 20% in 2015 to over 50% today.
EXPORT ACTIVITY SHOWS ENCOURAGING RECOVERY
Export activity, which has been declining steadily since the 2016 EU Referendum, is now showing signs of recovery. The proportion of BPF members exporting fell from around 80% prior to the EU referendum to a low of 65% in early 2025. This has now increased to 71%. Similarly, the proportion of companies expecting export growth increased from 27% in June 2025 to 34% in January 2026, which suggests improving international demand and continued global competitiveness for UK plastics manufacturers.
SKILLS SHORTAGES REMAIN A STRUCTURAL CHALLENGE
Skills shortages remain a significant challenge for the industry. In the latest survey, 54% of members reported difficulties recruiting staff. While this is lower than the peak of 81% seen in 2021–2022, it reflects reduced hiring activity rather than improved labour availability. Shop floor workers and engineers remain the most difficult roles to fill. Of increasing concern is the growing difficulty in recruiting sales staff, with the proportion of companies reporting challenges rising from 13% in 2021 to 37% today.
Workforce demographics have also shifted. In 2015, around 11% of the plastics workforce came from the EU. This has since fallen to approximately 6%, further tightening the labour market. Members continue to report declining availability of skilled candidates, particularly in injection moulding and technical roles. Industry perception also remains a barrier to recruitment, especially among younger workers.
GENERAL OPTIMISM REMAINS WEAK, BUT SIGNS OF IMPROVING CAPACITY UTILISATION APPEAR
Measuring overall optimism across the sector is always challenging, and the latest survey presents a mixed picture. On the operational side, there are some encouraging signs. Forecast capacity utilisation over the next 12 months increased slightly, rising from 71% to 72%. More significantly, the vast majority of BPF sector groups (85%) expect utilisation to increase over the coming year. This includes positive outlooks from recyclers, polymer distributors, rotational moulders, equipment suppliers and additives and masterbatch producers. This suggests that, at an operational level, many businesses expect activity levels to strengthen.
However, broader business confidence remains weak. Prior to the July 2024 general election, 64% of members described themselves as either ‘optimistic’ or ‘very optimistic’ about overall business conditions. By January 2026, this figure had fallen to 14%. Members’ views on government policy appear to be a significant factor. None of the survey respondents reported that the November 2025 Budget had a positive impact on their business. When asked how well the UK Government is supporting manufacturing, 90% of respondents said support was ‘bad’ or ‘very bad’.Taken together, these findings suggest that while companies expect activity levels to improve modestly, confidence in the wider economic and policy environment remains fragile.
EARLY SIGNS OF STABILISATION AND CAUTIOUS OPTIMISM
The latest survey confirms that while the UK plastics industry continues to operate in a difficult environment, there are clear signs that conditions may be stabilising. Export activity is recovering, capacity utilisation is expected to increase, and companies continue to invest in automation and efficiency improvements. While it’s too early to describe this as a recovery, the data suggest the industry may be approaching a turning point. A more stable economic environment and clearer industrial policy framework will be critical in determining whether this stabilisation translates into sustained growth.