German chemicals continue to recover as demand picks up - VCI

03 November 2009 17:07  [Source: ICIS news]

LONDON (ICIS news)--The German chemical industry's recovery is continuing to improve amid increasing demand for more base and specialty products from Asia and Latin America despite production levels remaining below pre-crisis levels, trade group VCI said on Tuesday.

Chemical production rose 4% in the third quarter compared to the previous one, with revenue also rising 5.5%. Production previously rose 2.5 % in the second quarter from the first.

"It is encouraging that more and more industrialised nations are freeing themselves from the grip of the economic crisis,” said Ulrich Lehner, VCI Chairman.

"Industrial production in Asia has almost regained levels seen before the crisis. In addition, South American economies are on the upswing. That should buoy demand from abroad in the next few months," the association added in a statement.

However VCI said full year chemical production would drop about 10% from 2008, the biggest year-on-year decline since 1975, and it added that full year industry sales would fall 12% from 2008.

It also said Germany's chemical makers sustained a sales slump of 15% year on year in the third quarter.

VCI said that despite industrial production in Europe moving out of a trough, the situation remained difficult overall, and that while capacity utilisation had recovered to 76.8 percent, it still remained way below its usual average.

Employment in the German chemical industry, the country’s fourth-largest sector, fell 2% year on year to about 432,900 in the third quarter of 2009.

Meanwhile, in its autumn projection for 2009 the European Commission raised Germany’s economic forecast and said the country’s export-led improvement would eventually turn into a broad-based recovery that would gather pace in 2011.

However the Commission said Germany had to, “reconcile the necessary fiscal consolidation with the strengthening of the economy's long-term growth potential."

German GDP was expected to contract 5.0% in 2009, grow 1.2% for 2010, and show a further growth of 1.7% for 2011, the Commission said.

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By: Franco Capaldo
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