VCI report on the business situation of the German chemical industry in the 2nd quart

Setback for the German chemical business

In the 2nd quarter 2014 the production in the German chemical industry fell by 2.3 percent; sales dropped by 1.2 percent. The underlying reasons: weaker domestic demand and – in foreign business – the slow recovery of the European economy. The VCI is expecting the demand to once more pick up again somewhat in the 2nd half 2014 if the geopolitical situation does not get any worse. For the overall year 2014 the VCI has lowered its forecast to a production increase by 1.5 percent and sales growth of 1 percent.

VCI Quarterly Report © VCI
VCI Quarterly Report © VCI

In the 2nd quarter 2014 the German economy was less dynamic. This noticeably impacted the business activities of chemical-pharmaceutical companies, accord-ing to the latest quarterly report by the German chemical industry association Verband der Chemischen Industrie (VCI).

As compared with the previous quarter, production and sales in Germany’s third largest industry dropped from April to June 2014. The prices for chemical products were stable. In particular the domestic business of chemical companies weakened, because many industrial customers responded to geopolitical risks: they cut back production and, consequently, ordered fewer chemicals. Foreign sales once more fell slightly, due to the slow recovery of the European economy.

VCI President Karl-Ludwig Kley on the recent business developments: “In the second quarter 2014, the German chemical industry had to cope with an economic setback. But for the 2nd half of the present year we are expecting the demand to pick up again somewhat if the geopolitical situation does not get any worse.”

Forecast

In view of the less favourable economic situation most recently, the VCI now forecasts an increase in chemical production by only 1.5 percent. With prices falling by 1 percent, chemical industry sales should probably rise by 1 percent to 192.5 billion euros.

Production

In the 2nd quarter 2014 the chemical production fell by 2.3 percent against the previous three months. The decline was strongest in the basic chemicals business. Overall, from April to June 2014 the total production was still 0.3 percent higher than back in the 2nd quarter 2013. Capacity utilization remained good at 84.4 percent.

Producer prices

In the 2nd quarter 2014 the prices for chemical products were stable, as compared with the previous quarter. But in the period under review the prices for chemicals were still 1.7 percent lower than in the 2nd quarter 2013.

Sales

Due to the falling demand, the sales level of the first quarter 2014 was not maintained in the German chemical industry. Seasonally adjusted, chemical industry sales dropped by 1.2 percent to 45.8 billion euros from April to June 2014. Domestic sales fell by 2.8 percent to 17.8 billion euros.

Employment

In the 2nd quarter 2014 the number of employees in the German chemical industry rose by 1 percent against the previous year. At present, German chemical companies have 442,000 staff.

Please note:
The full version of VCI’s quarterly report 2/2014 (VCI-Quartalsbericht 2/2014; in German language) is available in the download section at the top of this page. Additionally, you will find a 1-page executive summary in English.

The VCI represents the politico-economic interests of over 1,650 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media. The VCI stands for over 90 percent of the chemical industry in Germany. In 2013 the German chemical industry realised sales of more than 190 billion euros and employed around 438,000 staff.

Contact: VCI Press Dept., Phone: +49 69 2556-1496, E-Mail: presse@vci.de
Please note: VCI news about the chemical industry is also available via Twitter: http://twitter.com/chemieverband

For questions or suggestions, please feel free to contact us.

Contacts

Dipl.-Pol. Oliver Claas

E-Mail: claas@vci.de