German industry raises 2011 export growth forecast to 11%

07 June 2011 17:37  [Source: ICIS news]

LONDON (ICIS)--Germany’s exports should increase by around 11% this year, the country’s leading industrial trade group said on Tuesday.

The Bundesverband der Deutschen Industrie (BDI) said it raised the forecast from 7.5% after Germany’s strong first-quarter export performance.

However, despite the bullish forecast, BDI president Hans-Peter Keitel warned the country not to pursue energy policies that could put Europe’s largest industrial producer “offside.”

He was referring to government plans to phase out nuclear power in the wake of March’s earthquake and tsunami disaster in Japan. Chemical and other industrial producers fear that this will lead to a rise in energy prices, thus making Germany-based production less competitive internationally.

In the first quarter, Germany’s exports rose 19.3% year on year to a record €258bn ($374bn), the group said.

With €91bn in exports, March marked Germany’s strongest monthly export performance in 50 years – despite the Japan disaster and unrest and conflict in the Middle East and North Africa, the group said.

Germany's first-quarter chemical and pharmaceutical industry exports were up 14% year on year, driven by exports to European countries, BDI said.

Despite strong year-on-year growth rates in exports to Asia, Europe remains the largest export market for Germany’s chemical industry, the group said.

Going forward, BDI forecast strong growth in Germany’s chemical exports to China, India and Brazil while trade with European countries would grow at slower rates.

The group also noted tough competition from South Korean firms in the market for chemical plant building and engineering.

While Germany’s chemical engineering firms still have a technological lead, South Korean firms are competing on price and are willing to take on more risks than competitors to win market share, BDI said.

Last month, Germany's chemical industry trade group, VCI, doubled its forecast for the country’s 2011 chemical production to 5.0% after a strong first quarter. VCI is a member of BDI.

Read Paul Hodges’ Chemicals and the Economy Blog
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By: Stefan Baumgarten
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