Europe chemicals output rises as wider industrial production softens
LONDON (ICIS)–Chemicals production in Europe largely increased in September compared with the previous month, according to the latest data released from the EU’s statistical agency Eurostat on Friday.
Demand for raw materials and intermediate products has sustained activity in the chemicals industry, as perpetual bottlenecks and soaring energy costs have weighed on the manufacturing sector overall.
All but Spain of the key economies marked an increase in output, but the rate of growth varied between regions.
The chemicals sector was stronger than the reading for overall industrial production in September, which fell by 0.2% in the eurozone and by 0.5% in the EU compared with August.
Although output fell, the rate of decline eased compared with August, when industrial production fell in the eurozone and wider EU by 1.7% and 1.5% respectively.
Energy production remained stable compared with August in the eurozone, but increases in the production of durable and non-durable consumer goods were not enough to offset the declines across capital and intermediate goods.
Production of capital goods also declined in the wider EU, as intermediate goods remained stable. Production of energy, non-durable and durable consumer goods rose compared with the previous month.
Compared with September 2020, when the pandemic had a more pronounced impact on the manufacturing sector, production remained significantly higher – up 5.2% in the eurozone and 5.0% in the EU.
All sectors apart from energy tracked increases in production in both the eurozone and wider EU compared with September 2020, with non-durable goods marking the biggest increase for both regions (at 8.5% and 8.3%).
Energy production remained stable in the eurozone compared with the previous year, pitched against a 2.8% increase in the wider EU. Durable consumer goods tracked the smallest increase in the EU, up 1.9% compared with September 2020.
The latest data was better than analysts at Oxford Economics had anticipated as the respective blocs performed better that the four key European economies.
Output in Germany was the weakest, falling 1.1% month on month, while remaining 9.5% below pre-pandemic levels in the face of the current economic headwinds.
“Shortages of materials and equipment coupled with lengthened delivery times, higher transport costs and surging energy prices represent the main challenges the sector is facing,” said Oxford Economics.
“Looking forward, we expect eurozone industrial production to recover only gradually in the coming quarters as long-lasting global supply bottlenecks and input shortages will continue to limit manufacturing output until mid-2022.”
(Thumbnail picture: BASF’s acetylene plant in Ludwigshafen, Germany. Source: BASF)
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