26 October 2012 08:43 [Source: ICB]
BASF last week posted double-digit declines in operating profit across four of its five chemicals divisions in the third quarter of 2012, and signalled that it expects no improvement for Q4 this year.
The firm lowered its expectations for the global economy next year, with global GDP growth expected to reach a meagre 2.2% (down from 2.3%) and chemical industry output declining from 3.5% to 2.9%. It also highlighted slowing economic growth in China.
BASF's results signal just how tough trading conditions have become for Europe-oriented chemical companies in the latter part of the year.
The figures come on top of a slew of depressing economic and industrial data, especially from Europe.
Financial data group Markit released a survey of around 5,000 eurozone firms that shows an accelerating contraction in business activity. Even more worrying, confidence among German business leaders declined to a two-and-a-half year low, according to the IFO Business Climate Index that posted its sixth successive fall.
End-user markets such as automotive are suffering, even in the luxury sector which has, thus far, proved more resilient to the downturn.
Daimler last week warned it would miss its 2012 earnings target by around €1bn ($771m).
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