Germany chem employers say chemical business still ‘disappointing’

08 October 2013 16:03  [Source: ICIS news]

LONDON (ICIS)--Germany’s chemical business has “disappointed expectations”, with chemical production still below levels from before the economic and financial crisis five years ago, the country’s chemical employers group, BAVC, said in an update on Tuesday.

At the same time, however, Germany’s energy and labour costs keep rising, Wiesbaden-based BAVC said.

“In the past 10 quarters, the chemical industry did not record any significant increase in production,” BAVC said.

“Today, chemical production is still below pre-crisis levels of 2007,” it said.

“Meanwhile, cost trends are going only in one direction: upward,” the group said.

BAVC said that rising energy costs jeopardised Germany’s competitiveness as a site for chemical production.

In the absences of “massive measures” to counter rising energy costs, more and more firms would avoid investing in Germany, the group added.

Furthermore, even though the hoped-for revival of chemical business activity did not take place, Germany’s labour costs continued to rise, BAVC said.

BAVC said that only Belgium-based chemical firms were facing higher labour costs than Germany-based producers. In all other major competitor countries, chemical industry labour costs were lower, it said.

BAVC's remarks come as Germany’s chemical union IG BCE is expected to soon announce its demands for the upcoming 2014 collective bargaining round.

Germany’s chemical workers won a wage hike of 4.1% in 2011, and under the current 19-month collective framework agreement from 2012, they got a 4.5% rise.

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

By: Stefan Baumgarten
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