ZCZC
BCN-42
GERMANY-ECONOMY-CHEMICALS
Trade fears, Brexit overshadow German chemical firms
FRANKFURT AM MAIN, Sept 5, 2018 (BSS/AFP) – German chemical firms enjoyed
a strong second quarter, the powerful VCI industry federation said Wednesday,
but see “clouded” prospects ahead as Brexit looms and America’s trade
showdown with China swells.
Between April and June, the roughly 1,700 companies represented by the VCI
reported a 5.4-percent year-on-year increase in production, a 1.1-percent
increase in prices and a 5.8-percent increase in sales.
Nevertheless, “much points to demand ebbing in the second half of the year
compared with the first,” federation president Kurt Bock said in a statement,
adding that export forecasts were “especially” weakened.
Compared with the first three months, high economic growth in Asia and the
United States made for increased demand for chemicals, while Latin America
and Europe lagged behind.
Pharmaceuticals makers had the best quarter of any sector, booking 13.2
percent year-on-year sales growth, compared with 3.0 percent for non-pharma
firms.
Looking ahead, “risks to the business situation have increased sharply
since the beginning of the year,” the VCI judged.
“Brexit is growing closer and closer without the UK and European Union
being able to agree on rules for what comes next,” it pointed out.
And President Donald Trump’s increasingly aggressive trade policy towards
both China and traditional partners like the EU means that “uncertainty is
growing”, prompting some chemicals buyers to slow production.
The federation nevertheless still forecasts increased production and
prices over the second half of the year, with sales set to rise 4.5 percent
to 204 billion euros ($236 billion) — mostly powered by pharmaceuticals.
Employing some 460,000 people, the chemical industry is Germany’s third-
largest by revenue after carmaking and machine tools production.
BSS/AFP/HR/1432