Cefic Chemicals Trends Report EU Chemicals Output up 7.0 Per Cent
EU chemicals production pushed further upwards in January, increasing 7.0 per cent compared with January 2010, according to the latest Cefic Chemicals Trends Report. The report also released year-end 2010 figures for exports and sales that show strong increases, while the employment level contracted modestly.
Brussels, Belgium – Cefic Chief Economist Moncef Hadhri commented: “The production trend is encouraging as the EU chemicals sector continues to press on with export-led growth. The record trade surplus reflects a long-term trend of increased trade flows between the European Union and the rest of the world.”
Record Trade Surplus in 2010
Export data show a €47 billion trade surplus for the EU chemicals sector in 2010, surpassing the record level set in 2009 by €4.4 billion or 10.3 per cent. The trade surplus spike comprised a €13 billion net trade surplus with non-EU Europe and a €11.2 billion net trade surplus with the NAFTA region. The net trade surplus with Asia, not including Japan or China, was €8.0 billion. The EU-27 bloc posted a €1.3 billion net trade deficit with China, however, the only major trading partner to do so. The “Rest of Europe”, or non-EU countries in Europe, had the most trade with the EU market, as total trade between the two areas registered €61.8 billion in 2010, followed by NAFTA at €58.8 billion.
EU Production Growth Pushes on
Chemicals production in the European Union stands at about 1.4 per cent below its peak 2007 level. The January 2010 EU production index was up 23.1 per cent from the low in December 2008. Consumer chemicals production increased 9.3 per cent in January compared with the year prior. Polymers production rose by 6.5 per cent compared with the same period the year prior. Petrochemicals rose by 6.0 per cent while basic inorganics grew by 5.9 per cent. Specialty chemicals rose 3.6 per cent.
EU Chemicals Employment
Employment in the EU chemicals industry decreased by 2.6 per cent during 2010 compared to 2009, according to Eurostat data. Employment in the sector was 1.16 million in 2010, down 31,000 from 2009. The EU chemicals industry is shedding jobs at a slower year-on-year rate than the steep 4.7 per cent drop experienced in 2009, more than double the 15-year trend job loss rate of two per cent.
EU chemicals prices push up
Prices registered in January 2011 were 9.4 per cent higher than in January 2010. Petrochemicals registered a 17.6 per cent increase for the year, plastics were up 13.7 per cent and basic inorganics increased 11.9 per cent. The price upswing for the sector was mainly due to uncertainties surrounding the business climate in the Middle East. Price data shows that chemical products excluding pharmaceuticals were 5.5 per cent higher in 2010 compared with 2009.
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.