Cefic Chemicals Trends Report

EU Chemicals Output up 7.0 Per Cent

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Economic Sentiment Indicator (ESI) Stable

In March, the Economic Sentiment Indicator (ESI) was broadly unchanged at 107.4 in the European Union, while it decreased by 0.6 point to 107.3 in the euro area. The overall decline in the euro area resulted from broadly unchanged sentiment in industry and weakening confidence in the other business sectors and among consumers. In the EU, industry and services remained on an upward trend offsetting the declines observed in retail trade, construction and among consumers, according to the March 2011 Business and Consumer Survey (BCS) published by the European Commission.

Among the seven largest Member States, Poland (-3.1 points), Spain (-3.0) and Germany (-0.7) reported decreases, while the Netherlands (+3.1), the UK (+2.7) and France (+0.9) improved. Meanwhile, Italy (+0.1) remained broadly stable. The ESI is above its long-term average in five of the seven largest Member States. Poland went back to just below its long-term average, while Spain remained well below it. Sentiment in industry increased further - by 0.6 points - in the European Union. Production expectations decreased both in the European Union and in the euro area, despite an improvement in the assessment of the level of order books and an increasing number of managers considering their stocks as not sufficient. Managers were also slightly more pessimistic about their export order books. Sentiment in services rose in the European Union (+0.6). Managers were more positive about expected demand but more pessimistic about demand observed in the past months. Sentiment in construction decreased in both the European Union (-1.6) and the euro area (-0.8), partly offsetting the improvement registered in February. The indicator remains at very low levels in both regions. Sentiment in the retail sector weakened in both the EU (-0.3) and the euro area (-1.3). Also, confidence among consumers decreased in both the European Union (-0.4) and the euro area (-0.6), reflecting more pessimism about the future general economic situation, consumers' future financial situation and their possibility to save money in the next 12 months. In contrast, consumers reported slightly decreasing unemployment fears.