LONDON (ICIS)--The German chemicals industry's output rose in July, month on month, and companies expect production in August to have been stable.
The chemicals and pharmaceutical sector edged up to 95.8 points in July from 94.1 points the previous month, points according to the output index compiled by the German Federal Statistics Office (Destatis).
While this marks an improvement on the previous month, the rate of growth has slowed from June’s levels, and remains down on the previous July’s 99.7 points.
Overall production is 1.2% up for July on the previous month, but remains 10.0% down on the previous year.
Production of downstream products increased month on month as manufacturing of rubber, plastic products and other non-metallic mineral products rose to 93.1 points from 89.4 points.
Year on year, however, they fell year on year from 102.0 points.
Production in the petrochemicals-intensive automotive industry rose by 6.9% month on month, but still remains more than 15% lower than in February 2020.
The construction industry's output fell to 110.6 points from 115.6 the previous month and from 112.8 points in July 2019.
The softening in the construction sector may be short-lived; IHS Markit’s purchasing managers’ index (PMI) for that sector rose from 47.1 in July to 48.0 in August.
While anything under 50.0 remains in contraction, the data shows that the rate of decline slowed for August.
Overall sentiment for German industrial production largely increased, according to latest data comprised by the Ifo Institute, with overall expectations rising to 14.5 points in August from 14.3 points in July.
This was not the case for the chemicals industry, which remained stable at 19.0 points, echoed by the pharmaceutical industry at 22.0 points, but this may not be a pessimistic sign.
Lockdowns throughout the second quarter brought volatility to production to some end markets, especially those exposed to consumers.
Expectations for the automotive industry were pitched at 49.0 points in August, down slightly at 48.0 points in July.
"For the first time in a year or so, the machine-builders expect their production to expand again. The expectations in metal production and processing are positive for the first time in almost two years," said Ifo.
Front page picture: A vessel passes by
chemicals plants by the River Rhine in
Source: Frank Augstein/AP/Shutterstock
Focus article by Morgan Condon