Ger­man chem­i­cal firms warn of po­lit­i­cal risks

Viet Nam News - - WORLD BUSINESS -

BER­LIN — Ger­man chem­i­cals pro­duc­ers are in­creas­ingly con­cerned about risks stem­ming from swelling trade con­flicts, Brexit as well as ten­sions in the Mid­dle East de­spite a strong per­for­mance dur­ing the first quar­ter (Q1) of 2018, a re­port pub­lished yes­ter­day by the As­so­ci­a­tion of the Chem­i­cals In­dus­try (VCI) warned.

The VCI re­port high­lighted that gross rev­enue in the com­pa­nies it rep­re­sents grew by 5.7 per cent com­pared to the same pe­riod last year, reach­ing a to­tal of 51.1 bil­lion eu­ros (US$43.3 bil­lion) in Q1.

At the same time, out­put in­creased by 6.7 per cent on an an­nual ba­sis. While the out­look re­mained pos­i­tive for the cur­rent year, how­ever, the VCI also drew at­ten­tion to grow­ing risks which could un­der­mine fu­ture growth.

“Most firms are still con­fi­dent that the up­ward trend for chem­i­cal busi­ness will con­tinue through­out this year. Nev­er­the­less, the eco­nomic risks have in­creased,” a state­ment by VCI pres­i­dent Kurt Bock read.

The pro­tec­tion­ist poli­cies of the United States, po­ten­tial po­lit­i­cal con­flicts in the Mid­dle East due to the US with­drawal from the Iran nu­clear accord, and the un­cer­tain out­come of Brexit ne­go­ti­a­tions in par­tic­u­lar posed se­ri­ous threats.

The VCI noted among oth­ers that an es­ca­lat­ing con­fronta­tion be­tween Wash­ing­ton and Te­heran would place pres­sure on crude oil prices, mak­ing sta­bil­i­sa­tion efforts on be­half of coun­tries rep­re­sented in the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries (OPEC) more likely.

Crude oil is a cru­cial raw in­gre­di­ent for the Ger­man chem­i­cals in­dus­try. Out­put and chem­i­cal prices were also up on a quar­terly ba­sis dur­ing the first months of 2018, a de­vel­op­ment which was mainly at­trib­uted to strong de­mand in the chem­i­cals in­dus­try’s Euro­pean home mar­ket in par­tic­u­lar.

Look­ing for­ward, Ger­many’s third largest in­dus­trial sec­tor now ex­pects to achieve an­nual gross rev­enue of 204 bil­lion eu­ros (plus 4.5 per cent) and wit­ness rise in chem­i­cal pro­duc­tion by 3.5 per cent.

Ad­di­tion­ally, early signs of grow­ing head­winds in the Ger­man and world econ­omy had al­ready led com­pa­nies to slow the pace of their new re­cruit­ing. — XIN­HUA

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