17 January 2000 00:00 [Source: ICB Americas]The European chemical industry is already strengthening its forecasts for growth this year, mainly because of increasing demand for its exports, particularly from the UK.
Malcolm Mitchell, chairman of the economic forecasting panel of the European Chemical Industry Council (Cefic), told a business outlook conference in London last week that European chemical production would rise by just under 4 percent this year, compared to 2.6 percent in 1999.
At a Cefic meeting in Brussels in late November, he predicted that chemicals output would go up by 3.3 percent in 2000. "The gathering momentum in exports is infusing greater confidence throughout the industry," he told the London conference.
The increase in exports has been helped by a 10 percent depreciation of the euro since early last year. But there has also been a big increase in exports to the UK, which is outside the euro zone and has the disadvantage of a strong pound sterling.
UK chemicals growth picked up sharply last year, led by a double-digit increase in pharmaceuticals. "A key factor behind this acceleration was the stunning surge in export volume, which rose by 17 percent in the third quarter--the biggest rise since the late 1970s," said Mr. Mitchell, chief economist for BP Amoco Chemicals.
Chemical production in the UK is now expected to go up by 4.5 percent in 2000, according to Mr. Mitchell. This would be the second largest increase among the leading European countries, trailing only France.
The German chemical industry association (VCI) forecasts a 4 percent increase in output this year, about the same as in 1999, when foreign sales rose by 2.7 percent but domestic sales dropped by 2.5 percent.
"Production is expected to rise in most customer industries [in Germany] and also private consumption will pick up again. [This] will be to the advantage of the chemical industry," Manfred Schneider, president of VCI and chairman of Bayer, told a Frankfurt press conference last week.
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