Europe chem buyers more confident despite Brexit concerns – October CMCI

LONDON (ICIS)–European chemical buyers’ confidence in the market significantly strengthened in October across most indications, according to the latest Chemical Markets Confidence Index (CMCI) from ICIS.

Buyers are very confident in current business conditions at the moment, with the rating climbing by 17.9 points when compared to September to stand at 84.6.

Despite concerns around Brexit, buyers are also more confident (+12.1 points) than they were in September that the economic environment will remain in a good place over the next year.

In a change from last month’s sentiment, order book volumes are expected to improve over the next 12 months with confidence nine points higher than it was in September.

Similarly, expectations for future profitability are on the rise with confidence for the next 12 months 5.6 points higher than it was last month when it stood at the lowest level since CMCI data was first gathered in May.

Buyers are clearly seeing the modest improvements in the European economy after a turbulent period in the immediate aftermath of the UK’s vote to leave the EU and this is reflected in their outlook for the next year.

However, when looking back at the last 12 months, buyers are a little disappointed with order book volumes as we see the index dropping below the zero mark to stand at -3.8 points having sat right on the fence in September (0.0 points).

Likewise, profitability compared with the last 12 months was down 6.4 points compared to September when it had risen slightly by 2.6 points.

Overall, sentiment in the chemicals industry reflects a return to the negativity of Q2 after a temporary stabilisation earlier in this quarter.

The newly established ICIS Europe CMCI aggregates sentiment from hundreds of petrochemical market players actively involved in price negotiations across more than 60 different markets.

The Europe CMCI runs from +100, to -100, with zero on each index representing neutral, or uncertain conditions, a negative score indicating bearish expectations and a positive score representing bullish expectations. The indices also gather sentiment on the comparison between the current situation and the situation across the past 12 months to give a complete picture of current market conditions and confidence. The information is gathered in the third week of each month.  A full methodology is available on request.

For more details on the overall Europe CMCI data, click here