UKLA President’s Report
News of a lower inflation rate this month has provided some comfort for UK blenders. The headline rate now stands at 4%, down from a high of 11.1% in October 2022.
The price of falling inflation has been a squeeze on economic growth and consumer spending with interest rates now at 5.25% which is low by long-term historical averages but high compared with rates over the past 10-15 years.
Taxation too has increased to a 70 year high. Pay rises are outperforming inflation which could be the market catching up with rising prices but a concern for employers in controlling costs which could lead to recruitment freezes and headcount reductions over the short-term.
The lubricants market is by no means protected from these economic factors, as the sector remains a bellwether of the economy in reflecting the general level of economic activity.
The UK entered a recession at the end of 2023 which might be short-lived but the effects on many blenders, distributors and marketers has been subdued customer demand.
The resulting effect has been that
companies have curtailed non-essential expenditure including some business travel and looked at the structure of their operations.
It has often been said that the UK lubricants market moves in seven-year cycles of growth, stagnation and retraction and this year is no exception.
However if the recession is short-lived as the Bank of England expect, and indeed the economy is already showing signs of recovery, then the latter half of 2024 should prove to be far more promising than the first half.
Mike Bewsey, UKLA President
UEIL President’s Report
With the EU elections only a couple of months away, at UEIL we are preparing for the next 5-year EU mandate by putting together our advocacy strategy. The main themes that we aim to deliver in the next mandate are:
• Prioritise advocacy efforts around the key role lubricants play in scaling up the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets.
• Proactively inform policy making by leading the public debate in Brussels on how the European lubricants industry is contributing to the delivery of EU policies in relation to the economy, society, and the environment.
• Further raise our profile, deepen existing and develop new relationships with key EU stakeholders and strengthen our reputation as a partner and reference point on all issues linked to the lubricants industry during the EU’s new 5-year mandate.
4 LUBE MAGAZINE NO.180 APRIL 2024
Central to agreeing our advocacy strategy are three advocacy workshops, which have been scheduled for March, April, and June. These workshops are designed to be concise, focused, and outcome-oriented, ensuring swift progress towards the outlined objectives. All members are invited to participate and contribute.
Our aim is that the strategy should be ready to be deployed by the first Plenary meeting of the new European Parliament in July 2024, well ahead of the hearing for the nominated Commissioners.
We will be delighted to share more information about this initiative at our Annual Congress in Portugal in October. We hope to see many of you there!
Mattia Adani, UEIL President
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