Figures on the sector's investment performance and three-year forward forecasts are provided by an annual investment intentions survey carried out by the Chemical Industries Association (CIA).
The latest survey results show that the industry's capital spending in 1993 totalled £1.9 billion, 10.5% down on 1992. Further reductions are predicted through to 1995-6.
Data on environmental investments have been collected only since 1991. Three years ago, the CIA warned that the forecast levels of expenditure - shown in the table below - would be "unsustainably high". But as ENDS reported this time last year, events in each year since 1991 have shown the CIA's predictions of a growing burden of environmental investment to have been some way over the top (ENDS Report 219, pp 3-4 ) - and the pattern has continued this year.
Two years ago, CIA members predicted that environmental investments would account for 21% of their total capital spending in 1993. That would have been a steep increase on figures of 10% in 1991 and 14% in 1992. But the 1993 figure turned out to be 14%, identical to the year before.
In 1992, CIA members also predicted that environmental investments in 1994 would rise to 24% of the total. But this year they have pared down their expectations to only 15%. They still expect an increase to 16% next year, but this compares with last year's estimate of 23%.
The results show that chemical companies have consistently planned for a sharp increase in environmental expenditure three years ahead. This year's survey again indicates that environmental spending will increase to 20% of the total in 1996 - though this is the lowest prediction for four years.
As the CIA put it in its report of the 1994 survey results: "This is the same pattern we have seen in the two previous surveys although the extent of the ratchet up has been scaled down."
The industry is equivocal about the trend in environmental spending. A CIA press statement lists it as a positive feature. By contrast, at a conference in London, its Director General, John Cox, pointed to the projected doubling of environmental expenditure between 1991 and 1996 as "a major factor" in the spending profile, and added that "whether or not this is a burden is a moot point". The report itself notes that increased environmental expenditure brings "both costs and opportunities".
By no means all of the industry's spending on environmental protection is being forced by legislation. Only about 60% of last year's environmental investments were driven by regulation. This year the proportion is expected to rise slightly to 61% before falling back to 57% in 1995 and 1996.
Nevertheless, CIA members placed the environment at the top of a list of infrastructural and legislative constraints on their growth, ahead of the cost of utilities, transport infrastructure and "general burdens of bureaucracy".
The report also reveals a further reduction in capital investments in energy saving. This peaked at 17% of the total in 1983-4, but has since declined steadily as energy prices have fallen. The figure in 1992 was 6%, and a further decline to 5% followed last year. The trend will do little to support the industry's case that voluntary action to save energy will achieve more than the proposed EC carbon/energy tax.