German growth plans are dashed by terror attacks

15 October 2001 00:00  [Source: ICB]

Fall-out from the US terrorist attacks, coupled with already sinking production levels, lower sales and declining productivity, have dashed hopes of a return to growth in the German chemical industry this year, says the federal chemical employers association, BAVC.

In its October newsletter for industry executives, BAVC says a recession appears likely, as the only growth seen so far this year has been on the export side, and this market also looks shaky.

Since the start of this year, economic signs have been pointing downward, BAVC notes. The 3.3% sales increase in the first half is attributed entirely to price increases of 3.6%.

German chemical production has declined by comparison with 2000 and figures for the first seven months show a cumulative downturn of 0.8%. In contrast, the industry's output rose nearly 3% in full year 2000.

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The man-made fibres sector has been hardest hit, with a 7.3% slide from January to July, followed by soaps, detergents and cleansers, down 5.7%, and base chemicals, down 3%. BAVC notes 'the negative trend could not be balanced by good results for agrochemicals and pharmaceuticals'.

Following a 4.5% upturn in 2000, industry-wide productivity (per capita output) has fallen 0.3% since the beginning of 2001, while at the same time unit wage costs have risen 4.3%, due to lower capacity utilisation rates.

Employment was relatively stable up to July, declining only 0.6%. But BAVC warns that this 'positive trend' will not hold up.

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