Production in Germany’s chemicals-pharmaceuticals industry fell 6.5% year on year in the first half of 2019, with most sectors reporting declines, the country’s chemical producers’ trade group VCI said on Wednesday.
A good part of the decline was due to pharma where production fell 14.5% from unusually high H1 2018 levels.
Excluding pharma, H1 2019 chemical production fell 2.5% year on year.
Germany’s H1 chem-pharma production
|% change from H1 2018|
|Total, excluding pharma||-2.5%|
|Inorganic basic chemicals||1.5%|
|Petrochemicals and derivatives||Flat|
|Fine and specialty chemicals||-4.0%|
|Detergents, hygiene, cosmetics||-4.5%|
H1 chem-pharma sales fell 4.0% to €95.9bn, with domestic sales of €35.5bn (-2.0%) and foreign sales of €60.4bn (-5.0%).
Prices rose 1.5%, driven by higher raw material costs.
VCI cited “difficult framework conditions worldwide” in explaining the declines.
It pointed to slower growth of the global economy, the weak situation of industry in some parts of Europe, and uncertainty in markets due to political trade conflicts.
Going forward, risks to the global economy remain high, said VCI president Hans van Bylen, who is also CEO of adhesives and detergents major Henkel.
“There is the threat of rising tariffs between the US and China, and the danger of military conflicts in the Middle East is increasing,” he said.
“Should that come true, global trade would further slow – with strong impacts on German industry,” he said.
In addition, there remained the risk of a hard Brexit, he said.
VCI revised its forecast for the country's full-year 2019 chem-pharma production to a decline of 4.0%, from its earlier forecast of a 3.5% decline.
Prices are expected to rise 1.0% this year.
Full-year sales are expected to fall 3.0% to €196.9bn, with domestic sales down 1.0% and foreign sales down 4.5%.