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VCI ‘cautiously optimistic’ for German chemical industry in 2014, expects production rise of 2%

1:49 PM MST | December 13, 2013 | —Michael Ravenscroft

German chemical trade association VCI (Frankfurt) says it is “cautiously optimistic” about 2014 prospects, forecasting a 2% chemical production increase in the coming year. Chemical industry sales should rise by 1.5%, to €191 billion ($263 billion), with prices falling slightly by 0.5%, according to VCI. Most VCI member companies believe that business will pick up in the coming months but that there are “still too many differences in the signals from the various export markets for a lasting upswing,” says VCI.

“There will be an upward development next year for the German chemical industry, but a slow one,” says Karl-Ludwig Kley, president of VCI and chairman of Merck KGaA (Darmstadt, Germany). “We assume that the domestic economy will somewhat accelerate.”

German chemical production increased by 1.5% in 2013, but sales improved only slightly because of falling prices, VCI says. Domestic sales increased compared with those in 2012, while exports were flat, at €113 billion. Exports to non-EU countries increased by 2.5% in 2013 compared with decreases in Asia/Pacidic and Latin America of 1.5% and 3.0%, respectively. German chemical companies increased domestic investment to €6.4 billion, or 2%, in 2013, barely exceeding depreciation. Nearly half of this investment, or 42%, went into capacity expansion. Employment in the German chemical industry rose by 0.5% in 2013, to about 436,500.

German chemical exports—including foreign sales by chemical companies, reexports, and exports of chemicals by other industries—rose to €165.3 billion in 2013, an increase of 116% over 2000–13, compared with an increase in domestic demand of only 20% over the same period. German chemical imports increased by 111% in 2000–13, indicating that import growth is stronger than domestic growth, according to VCI. Germany’s chemicals foreign trade surplus has nearly doubled, increasing from €23.9 billion in 2000 to €53.9 billion in 2013. Salaries in the chemical industry are 66% above the average level for the overall economy, according to VCI.













 
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