EU chemicals continue bounce back

EU chemical production continues to rebound, increasing by 7% in January 2011, compared with January 2010. ‘The production trend is encouraging as the EU chemicals sector continues to press on with export-led growth,’ says Moncef Hadhri, chief economist at the European Chemical Industry Council (Cefic). The production level is still 1.4% below the peak achieved in 2007.

Looking at the production growth by sector, consumer chemicals rose by 9.3% in January 2011, compared with the same period in 2010, while polymers grew by 6.5%. Petrochemical production was up 6%, compared with January 2010, while basic organics grew by 5.9%. Speciality chemicals saw a 3.6% rise.

Export data show a €47bn trade surplus for the EU chemicals sector in 2010, a record level beating the previous record set in 2009 by €4.4bn or 10.3%. ‘The record trade surplus reflects a long-term trend of increased trade flows between the EU and the rest of the world,’ adds Hadhri.

The record surplus is made up from a €13bn net surplus with non- EU Europe and a €11.2bn surplus with the NAFTA countries, while the surplus with Asia, not including Japan or China, was €8bn. The only deficit in 2010, totaling €1.3bn, was with China. The non-EU countries in Europe represented the largest trading partner region for the EU with a total of €61.8bn of total trade, followed by €58.8bn with the NAFTA countries.

Chemical process grew 9.4% in January 2011, compared with 2010, due mainly to the uncertain situation in the Middle East and North Africa and its effect on oil prices. There was also an impact in 2010 as a whole, with EU petrochemical prices rising 17.6%, while plastics rose 13.7% and basic inorganics process increased by 11.9%, compared with 2009.

EU chemicals employment continued its long-term downward trend in 2010, decreasing by a further 2.6%, compared with 2009, to stand at 1.16m people. The only good news is that the EU industry is shedding jobs at a slightly slower rate than in 2009, when employment dropped 4.7%, more than double the 15-year trend loss of 2%.