Germany chems ‘cautiously optimistic’ despite Q1 decline - VCI

15 May 2013 17:13  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemical industry remains "cautiously optimistic" about prospects for 2013, despite a decline in the country's first-quarter chemical production, the president of the country’s chemical producers’ trade group VCI said on Wednesday.

Karl-Ludwig Kley said that while the first quarter had not brought the hoped-for improvement in economic conditions, there had been no setbacks, either.

"We are cautiously optimistic for 2013," said Kley, who is also CEO of Germany’s specialty chemicals and pharmaceuticals firm Merck KGaA.

However, economic conditions remained difficult, in particular in Europe, Kley said.

It was up to governments and political leaders to ensure that the industry’s international competitiveness would not be harmed by additional regulations or costs, Kley added.

He pointed in particular to potential burdens for Germany's industrial producers from the country's energy U-turn (Energiewende) to phase out nuclear power generation by 2022.

Earlier on Wednesday, VCI said that it was maintaining its forecast of 1.5% year-on-year growth in the country's chemical production in 2013 - even though first-quarter production was down 0.7% year on year and down 0.5% sequentially from the 2012 fourth quarter.

In an updated report, VCI said that despite recent "irritations" over elections in Italy and the banking crisis in Cyprus, conditions were in place for growth in overall industrial as well as chemical production this year.

While the eurozone debt crisis continued to overshadow the region, economists were confident that the crisis would not escalate, VCI said.

Meanwhile, German interest rates remained low and companies had good access to credits and loans. At the same time, Germany’s chemical producers remained highly competitive on international markets, VCI said.

However, while the global economy would grow, growth rates were expected to be weak.

In the US and Europe, restrictive government financial policies would dampen growth, VCI said. 

At the same time, Japan would likely see only a short-term boost from its monetary stimulus, the group said.

"Growth will need to come, above all, from the emerging economies," it said.

"China, India and Brazil remain the pace-setters for the global economy," it added.

In the 2013 first quarter, Germany’s chemical exports sales were up 3.5% year on year and up 1.0% sequentially from the 2012 fourth quarter.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog


By: Stefan Baumgarten
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