Cefic forecasts a recovery in 2002

The European Chemical Industry Council, Cefic, has predicted a slow-down in the overall output of the industry from 4.6% in 2000 to 1.1% in 2001. However, this year output is expected to recover, growing by 1.8%.

The macro-economic situation in Europe has been affected by the slowdown in world economic activity, especially by recession in both the US and Japan, the organisation says. This has affected the EU chemical industry both in terms of exports and home demand. While exports continue to grow faster than domestic sales, export growth has slowed to 4.3% overall – half the rate achieved in 2000.

The chemical industry sector was affected more than consumer-related markets and pharmaceuticals, which have continued to spearhead growth. 'Excluding pharmaceuticals, chemicals growth is actually expected to be -1.1% in 2001, which demonstrates the difficult times for our industry,' said Francois Cornelis, ceo of AtoFina and chairman of the Cefic international trade and competitiveness programme council (figure 1).

However, the latest forecasts suggest that the longer term prospects for the industry remain positive. Table 1 highlights the estimated and forecast growth rates for 2001 and 2002 respectively.

'Over time the new WTO trade round, the eastward enlargement of the EU, the introduction of the Euro and the continued liberalisation of the EU gas and electricity markets should provide a solid basis to our industry, enabling it to continue playing a leading role as a provider of key technology products', Cornelis said. But prospects for an early recovery were undermined by the events of 11 September, which badly affected worldwide business and consumer confidence.

Cefic believes that positive responses by the world monetary authorities and the fall in oil prices will help to limit the extent of the downturn and stimulate improvement in the second half of 2002 which, when it comes, could be quite rapid.