Growth gloom spreads to German chemical industry

FRANKFURT AM MAIN: Germany’s powerful chemical industry federation slashed its outlook for 2019, saying a slowing European economy and threats from further afield would drag on performance.

“The mood in the sector has recently clouded over significantly,” said Utz Tillmann, director of the Federation of the Chemical Industry (VCI).

“Industry in Germany and Europe is in a downturn.

“Important client industries are throttling production” including the vital car sector, still hobbled by tough new emissions tests introduced in September, Tillmann said.

The VCI forecasts a 3.5-per cent fall in production for 2019 and a 2.5per cent slip in revenues, to 198.5 billion euros (US$223.9 billion).

At its last quarterly update in December, the VCI had forecast “modest growth” for 2019, with a 1.5 per cent lift to production and 2.5 per cent higher sales.

Representing Germany’s thirdlargest industrial sector, the VCI gathers around 1,700 firms ranging from giant multinationals like BASF to tiny family companies, together employing over 460,000 people.

Many chemical makers stand upstream from manufacturers confronted with a slew of challenges.

Within the eurozone single currency bloc, heavyweight economy Italy is in recession amid fears over its public debt.

Outside, Britain is on the brink of a disorderly exit from the European Union later this month, Washington’s trade conflicts with Brussels and Beijing are rolling on and China’s growth has slowed markedly. — AFP