The European Chemical Industry Council, Cefic, is expecting a 3% growth in chemical output in the EU in 2017, driven by a growing demand from customer industries.
The growth trend, however, is expected to ‘decelerate slightly” to around 2% in 2018, the European body announced 7 Dec.
The recovery of the chemical sector follows the overall economic growth in the EU in the first three quarters of 2017, which itself was driven by a consumer demand and investments in new production capacities.
“The growth of the EU manufacturing production, primarily in the automotive, construction, metal production and electronics sector, has led to an increased domestic demand for chemicals,” Cefic said.
Additionally, the organisation noted that exports of the EU-produced chemicals to Asia and Russia also increased in 2017.
The outlook for 2018, however, is less bright as Cefic warned of the risk of “investment leakage” due to high energy and feedstock prices as well as carbon costs under the EU Emission Trading System (EU ETS).
“The EU chemical industry is facing fierce competition from China and NAFTA countries who currently dominate the global chemicals market,” the European organisation added.
Cefic said it would continue working with the European Commission and member states to develop the ‘Renewed EU Industrial Policy Strategy’ in order to improve the EU’s competitiveness compared to other regions.
Accounting for 1.1% of the EU’s GDP and employing 1.2 million people, chemicals sector is the third largest investor in EU manufacturing industries.