EU, US debt crises may hurt Germany's chemical growth – group

09 August 2011 21:43  [Source: ICIS news]

LONDON (ICIS)--The EU and US government debt crises have dampened growth prospects in Germany’s chemical industry, a trade group said on Tuesday.

Chemical producers are following the debt crises with “growing concern” as the situations in the EU and the US contain considerable risks that could spill over into Germany's chemicals industry in the second half of the year, employers group BAVC said in an economic update.

In the first six months of 2011, Germany's chemical firms recorded a 6.5% year-on-year growth in production, but their expectations for the second half of the year have weakened, the group added, citing an industry survey.

BAVC said in addition to the debt crises, chemical producers are worried about soaring raw material costs, as well as uncertainties created by Germany’s planned exit from nuclear power generation by 2022.

The nuclear exit and planned restructuring of Germany’s energy supply infrastructure could harm the overall competitiveness of industrial production in Germany, the group said.

Each euro 1 cent/kilowatt hour increase in electricity costs translates into additional costs of more than €500m ($714m)/year for Germany’s chemical producers, it added.

Germany’s chemicals producers group VCI has forecast 5% year-on-year growth in the country's chemical production for the full 12 months of 2011.

Meanwhile, recent economic forecasts pegged GDP growth for Europe’s largest economy at more than 3.0% this year.

($1 = €0.70)

Read Paul Hodges’ Chemicals and the Economy Blog

By: Stefan Baumgarten
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