EU chemicals industry sees signs of recovery

Brussels – European chemicals business confidence picked up during the final quarter of the year, driven by a strong uplift in production expectation, according to the latest data published by the European Chemical Industry Council (Cefic).

The improved confidence, however, was partly offset by a ‘slight deterioration’ in managers’ assessment of the current level of order books and piling up of stocks of finished products, said Cefic in its monthly chemicals report, published 6 Feb.

Consumers’ confidence, on the other hand, “kept recovering”, said Cefic citing the council’s business and consumer survey held in January.

“Consumers were more positive about the future financial situation of their household and about the future general economic situation,” it said.

Another positive note, according to Cefic, is the declining energy costs which has provided “a short relief” to the industry.

“The latest significant reduction in the cost of energy and the positive development of production expectation of managers should keep ensuring a solid recovery of our business during the coming months,” it said.

However, Cefic noted that the mood of the business climate has not yet been reflected in increases on the demand side.

According to the report, managers believe the level of stocks of finished chemicals is “too high compared to the normal levels.”

Data, it said, indicate “a second wave of increasing stockpiles during the last 10 months of 2022.”

In terms of trade, the region’s external trade environment for chemicals witnessed “a rapid loss of momentum” between March and September last year.

“The European recession and the weak development of China were the two key drivers behind the negative trend of exports and imports in volume terms,” said Cefic.

In terms of value, import value exceeded export value since between March and August, while the trend was reversed in August.

Cefic said that the latest data available on trade – between January and October 2022 – still highlight a trade deficit of about €1.7 billion in 2022 compared to the same period of 2021.