The dynamics of the UK chemical plant investment cycle

Orders for new chemical plant (sanctions) and investment in chemical plant both show marked business cycle like variations. Amongst the effects of the UK cycle on the Chemical Industry are variations in: new plant additions, requirements for capital expenditure finance and capital utilization. As far as the UK Process Plant Contractors and Process Plant Manufacturers are concerned, the cycle is reflected in a varying work-load arising from the UK Chemical Industry together with varying manpower requirements and profitability.The project described in this paper involved the construction of both System Dynamics and Control Systems models of the Investment Cycle as a guide to strategic planning for the industries affected by it.The implications of the results from both types of model for corporate and strategic planning in the industries concerned are discussed.