European chemicals output to rise 2% in 2014 – Cefic

LONDON (ICIS)–The European Chemical Industry Council (Cefic) said on Friday the chemical industry, excluding pharmaceutical products, in 2014 is set to grow 2% year on year on the back of a “general economic recovery” which will benefit downstream customer industries, particularly car-makers, and the construction sector.

As part of its bi-annual industry forecast, Cefic added growth in the chemical sector would slowdown in 2015 to 1.5% year on year as restocking gradually diminishes.

“The return to growth follows a modest fall in output during 2013 as the industry wrestled with the second slowdown of Europe’s double-dip recession. After a slump by more than 20%, Europe’s production of chemicals has yet to match the peak achieved in 2008,” said Cefic.

The industry group added in 2013 the fall had finally been less pronounced than it had initially forecast (0.5%) with the final figure placed at a decrease of 0.2% compared to 2012.

“However, [despite the return to growth] the recovery is volatile and the pace of expansion is being held back by high energy prices, which put European producers at a severe disadvantage compared to those in North America and the Middle East who benefit in particular from cheaper gas,” said Cefic’s president Kurt Bock, who is also the CEO of German chemical major BASF.

High energy costs is a recurrent complaint from chemical executives in Europe, and Cefic has repeatedly campaigned for EU policy makers to take action in order to help the industry to regain competitiveness.