EU chemical industry: moderate recovery in 2004 and slight improvement in 2005
Cefic estimates that output in the chemical industry (excluding pharmaceuticals) will grow by 2.4% in 2004. This relatively modest figure is well above the average performance for the last three years. With the prospect of a strengthening of European industrial activity, a further modest improvement is expected for next year, reaching growth of 2.6%.
In 2004, all EU chemicals sectors are experiencing improved growth compared to 2003. With the prospect of a revival of both economic and industrial activity in 2005, a further pick up is expected for pharmaceuticals (4.2% against 3.5%), petrochemicals (3.6% against 2.8%), plastics and synthetic rubber (3.6% against 2.5%). However, consumer chemicals (2.7% against 3%), specialty and fine chemicals (2.1% against 3.3%) and basic inorganics (1.5% against 1.8) are expected to grow at lower rates in 2005.
Pharmaceuticals have outperformed the growth of the EU chemical sectors for many years now. If pharmaceuticals are included, the overall output in the EU chemical industry is forecast to grow by 2.7% in 2004, reaching 3% in 2005.
The prospects for the EU chemical industry are sensitive to a number of downside risks: First, the continuing US Dollar weakness against the EURO is still generating some uncertainty as to the buoyancy of the external EU trade environment.
Furthermore, oil prices in 2004 have been supported by exceptional demand growth (especially China), the limited availability of spare production capacity and concerns over political issues, mostly relating to the Middle East. As the growth of the global economy will be lower in 2005 and oil demand reverting closer to the long term trend, prices are expected to ease towards a range nearer to $30-$35 per barrel. However, oil prices will remain highly sensitive to any underlying disruption to the markets, and for 2005, the balance of risks around prices remains firmly on the upside.
Most read news
Organizations
Other news from the department business & finance
Get the chemical industry in your inbox
From now on, don't miss a thing: Our newsletter for the chemical industry, analytics, lab technology and process engineering brings you up to date every Tuesday and Thursday. The latest industry news, product highlights and innovations - compact and easy to understand in your inbox. Researched by us so you don't have to.