The European chemicals manufacturing sector is set for a mini-rebound next year, according to industry association Cefic.
In a statement, Cefic said it was “cautiously optimistic” about prospects for 2019, with an anticipated growth of 0.5 percent year-on-year. This, it said, would mark a recovery from 2018, when production declined by 0.5 percent compared to 2017.
The organization linked the decline to “higher oil prices, lower demand from the automotive sector, and unusually low water levels in European rivers, which caused transportation delays.”
For next year, Cefic said demand is expected to increase “slightly” in the automotive, agricultural and construction sectors—the main customers of the chemical industry. There is concern, however, that performance might be impacted by trade tensions between the U.S., China and Europe, as well as the uncertainty around Brexit.
According to Cefic, investors and customer industries are becoming more cautious in the “volatile environment.”
But, Cefic director general Marco Mensink believes forecasted growth in manufacturing industries “should be sufficient to keep demand for chemicals at the same or higher level in 2019.”
According to Cefic figures, rubber and plastics customers form the largest portion of European chemical industry demand at 13.9 percent, followed by construction, pulp & paper and the automotive industry.
Polymers, including plastics, synthetic rubber and man-made fibers, contributed to 20.5 percent of EU chemical sales in 2017, which stood at $587 billion.
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