The turbulences in the world economy are affecting the
European business of chemistry. The financial crisis in the USA, the higher energy costs, and the stronger appreciation of the Euro against the US$ are generating negative effects on production growth of the EU chemicals industry.
Output in the EU chemicals industry (excluding pharmaceuticals) has started to
decline since March 2008, and output declined further in April 2008 by 1.3% compared to April of 2007. All chemicals sectors experienced relatively the
same negative trend in April where output declined in the range of 1.0 to 1.9%.
Pharmaceuticals are the only exception where output grew positively. Chemical products (excluding pharmaceuticals) were 5.3% more expensive in the first four months of 2008
than the same period of 2007.The mix of geopolitical tensions in the Middle
East, the robust Asian demand and investment traders in the commodities markets
has swelled oil prices to untenable levels for many energy-importing economies.
The chemicals confidence indicator for the EU reached relatively the same level
as in April and is still slightly above the long-term average. By contrast,
confidence in the manufacturing sector decreased further in May. The economic
climate for Europe and the world is experiencing a renewed decline. In May, the
Economic Sentiment Indicator (ESI) decreased further in the EU and stands below
its long-term average. According to the latest Results of the Ifo World
Economic Survey (WES), the World Economic Climate has worsened further in the
second quarter of 2008, the indicator having fallen to its lowest level in six
years. (Refer the slides below for more details)
