EU chemical industry remains on course for modest recovery

28-Jun-2004

Cefic, the European Chemical Industry Council, has reviewed and fine-tuned its economic forecast of last March. It continues to predict a modest recovery for the EU chemical industry in 2004, with slightly better growth expected across most EU chemicals sectors in 2005.

EU chemicals output (excluding pharmaceuticals) is expected to rise by 2.3% this year, and 2.7% next year (data for the new Member States are not included) Most EU chemicals sectors will see better growth in 2004, especially polymers and specialty and fine chemicals. In 2004, output in the overall European chemical industry (including pharmaceuticals) is forecast to grow by 2.7%. In 2005, the overall output in the EU chemical industry (including pharmaceuticals) is forecast to grow by 3.0%. One of the key drivers for the growth of the chemical industry is the further improvement of the global economy, led by the US together with Asia in general and China in particular. US GDP is forecast to rise by 4.5% in 2004, while in Asia expected growth across the region is 6.6%, providing a strong boost to world trade. By contrast, growth in the EU is likely to be more modest but still on an upward trend - with the GDP forecast to move from 0.7% in 2003 to 1.9% this year (Chart 1). In response to increased global activity, European industrial production is expected to grow faster, by 2.6% this year.

The forecasts are subject to a number of downside risks. Firstly, the high price of oil and gas, which is likely to persist and which may reduce overall economic growth and hence demand for chemicals. Secondly, the potential for a 'hard landing' in Asia, especially in China as the authorities seek to moderate the rate of economic expansion. Finally, potential exchange rate volatility - especially between the Euro and US dollar.

https://www.chemeurope.com/en/news/38229/eu-chemical-industry-remains-on-course-for-modest-recovery.html