EU Chemicals Economy
EU Chemicals Sector Output to Remain Stagnant in 2013
Looking abroad, the United States continues a slow recovery, but is running high deficits and faces a “fiscal cliff”, an automatic policy tightening that threatens to derail its rebound unless an alternative can be agreed. High economic growth rates in China have slowed slightly in 2012, due partly to falling Western demand as well as internal factors. Japan has relapsed into contraction as it faces a fall in exports to China, as a result of a territorial dispute.
Despite less robust overseas economies, export markets will likely be the only notable source of growth in 2013, especially from BRIC countries. Anxieties over the euro could resurface as many uncertainties are still to be resolved. In the longer term, US shale gas and the new chemical capacity being installed to exploit it, coupled with the associated reduction in US energy costs, pose a serious threat to EU chemicals production.
Bock concluded: “The EU chemicals sector faces increasing uncertainty as the domestic market continues to struggle and overseas competition remains relentless. EU policymakers need to continue to work towards putting Europe on better economic footing to help us move out of this difficult period.”