Chemicals sector continues downward trend

The export burden of the German economy has become a problem in recent months. Even the local chemical industry cannot escape this problem due to its high dependence on foreign markets. After incoming orders had already fallen by more than 1% in 2018, the first nine months of this year saw a further sharp decline. In view of this development, it is not surprising that production in the industry also had to be cut back significantly: in the period from January to September it fell by 3.2% compared with the same period of the previous year.
Capacity utilization at German chemical companies also tended to decline slightly last year. However, the decline was much more pronounced this year. Current capacity utilization, for example, is just over 80%; an even lower figure was recorded in the first quarter of 2010. Order backlogs were somewhat more positive, averaging the previous year’s level in 2019.

In view of weak demand, the chemical industry in Germany must expect a noticeable decline in sales this year. In the first nine months alone, sales were around 2.4% lower than in the comparable prior-year period. Production looks even worse: In the first nine months of 2019 it shrank by 3.2% compared with the previous year – not least because of the global economic slowdown. In 2020, the industry’s sales are likely to be at about the same level as in 2019. This is also indicated by the current improvement in the business climate. However, production will fall again in 2020, albeit probably only slightly.

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