— By Plasteurope.com correspondent — 

Margins under pressure, recruitment problems, and challenges facing the recycling sector continue to affect member companies of the British Plastics Federation (BPF, London; www.bpf.co.uk), according to the latest semi-annual survey carried out to gauge the UK plastics industry’s health and prospects.

The first poll of 2026, conducted in January, found that overall year-on-year turnover amongst the 93 BPF member companies who responded fell by 3.5%. The outlook for margins was also negative, albeit not as drastic as previous surveys had found.

However, the sales picture doesn’t tell the full story, according to the BPF’s membership services director Stephen Hunt. Performance varied significantly across the supply chain.

Some sectors reported growth, including pipe manufacturers (up 8%) and equipment suppliers (up 3.5%), while margins had also not witnessed the sharp deterioration seen in recent years, Hunt added.

Finding skilled workers remained one of the biggest headaches for the UK plastics industry, with more than half (54%) of those surveyed citing it as an issue.

The shortage of engineers was a particular concern for companies, and likely to put a dent in the sector’s productivity and ability to innovate.

Commercial staff were also hard to find, with more than a third (37%) of respondents reporting an issue, versus 13% five years ago.

Related: BPF sounds warning over recycling plant closures

When it came to capacity utilisation, this had increased by just one percentage point to 72% in January 2026, compared with the last survey carried out in July 2025, although the BPF’s Hunt suggested this may indicate stabilising demand conditions.

Capacity issues continued for recyclers, who reported average utilisation of just 58% in January 2026, compared with a 72% figure two years ago.

Prospects for those exporting goods improved, however, with the number of companies forecasting export sales to fall “reducing substantially”, suggesting to Hunt and his colleagues signs of an improving international outlook.

And despite the obvious challenges facing the UK plastics industry, at least sentiment appears to be improving. The survey found firms pointing to a strong finish to the end of 2025, and 2026 “starting on a more positive note”.

Related: Economic growth in UK improves in 2025, but plastics output weakens

Hunt summed up the mood: “In general our latest Business Conditions Survey presents a cautiously improving picture for the UK plastics industry. While many key indicators, including profit margin expectations and overall sales performance, remain under pressure, the rate of deterioration has slowed and there are several indicators showing early signs of stabilisation.

“Improved export sentiment, modest increases in capacity utilisation, and pockets of growth in some key sectors do point towards a potential turning point. We are conscious that there are persistent structural challenges, including skills shortages, high operating costs, and ongoing pressures within the recycling sector, and these are areas we are monitoring closely and continue to push government for action on.”