EU Chemicals Sector Growth to Resume Next Year, Follows Long-Term Trend in 2011

Brussels (ots/PRNewswire) -

Industry needs credible actions to stabilise markets and
confidence

Growth in European chemicals output will be weaker than expected
this year and next because of heightened business uncertainty and
inventory trimming, industry group Cefic said today.

The group's summary forecast of chemicals sector economists
predicts year-on-year growth of chemicals output for 2011 is likely
to be 2.0 per cent, in line with the historical trend growth rate and
against 4.5 per cent expected in June. Expansion in 2012 will
probably reach 1.5 per cent.

Cefic President Giorgio Squinzi said: "The continuing debt crises
in the eurozone and high US government debt level have undermined
macroeconomic sentiment since the summer.

"Companies are hoarding cash. The uptrend in oil prices has
halted, reducing the incentive to buy ahead. Added to this is
increased business uncertainty, which is encouraging reductions in
inventories. Lower output growth is the inevitable result."

Following on from a strong demand recovery with double-digit
growth in 2010, much of this year's rise in chemicals output took
place in the first quarter. Since then output has been relatively
flat.

Cefic believes chemical industry growth will resume during 2012,
however, strengthening slowly through the year. Its forecasters
expect underlying EU gross domestic product growth of 1.0 per cent in
2012, down sharply from the 1.8 per cent they predicted in June.

But risks remain, mostly on the downside. Growth in most
developed economies remains perilously slow, and austerity measures
are provoking political protest. Developing Asian economies continue
to grow, but asset bubbles there could deflate suddenly.

Consumer chemicals were the star of the European industry in
2011, with growth of 6.6 per cent. They remain the top growth sector
in 2012, at 2.5 per cent. Other chemicals sub-sectors are near the
average, although pharmaceuticals are expected to attain 3.0 per cent
growth in 2011 and 2.0 per cent in 2012.

EU output continued to be driven by external demand. The EU
external trade surplus narrowed slightly during the first three
quarters of 2011 from the record level reached in 2010. In 2012 the
surplus is expected to be roughly stable, and inventories are also
expected to cease falling. Construction stabilised in 2011, after
prolonged contraction, and may grow a little in 2012.

Squinzi concluded: "Companies have reported relatively strong
global results for the third quarter and are in good financial
health. If the eurozone can finally establish an effective solution
to the debt crisis, and deliver credible actions to stabilise markets
and confidence, the European chemical industry can look forward to
renewed growth through 2012."

But he warned that European chemical producers continue to suffer
from high regulatory and social costs, and high energy prices. Yet in
the U.S. shale gas development is attracting a new round of
investment in basic petrochemicals, and the Middle Eastern capacity
build-up continues. "Global competition remains fierce," he said.

Notes to editors:

About Cefic

Cefic, the European Chemical Industry Council, is the
Brussels-based organisation representing the European chemical
industry. Created in 1972, it represents 29,000 companies that
produce about 21 per cent of the world's chemicals and employs about
1.2 million people. For more information, go to http://www.cefic.org
- Cefic's website.

Biography and images of Messrs Squinzi and Mandery

A full biography (.doc) and a print-quality image of Messrs
Squinzi and Mandery in high-resolution, .jpeg format is available
online at http://cefic.be/en/511.html

ots Originaltext: CEFIC
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Media contact: James Pieper on +32(0)2-676-7398 or at
jpi@cefic.be ; Contact for Cefic members: Dr. Moncef Hadhri on
+32(0)2-676-7282 or at mha@cefic.be