EU Chemical Industry Confidence Shows Upward Trend
In its Chemical Trends Report for March, CEFIC, the European Chemical Industry Council, states that Europe has been more impacted by the energy crisis than other regions and structural issues need to be addressed.
The EU27 chemical industry has been gradually losing its competitive edge in the global market. As energy-intensive industry, high energy costs are the Achilles heel of the chemical sector, especially when compared to the US and Middle East who have the advantage of lower energy costs.
However, according to CEFIC, energy costs are not the only contributing factor. Stalling investments in Europe could also be attributed to regulatory uncertainty, unclarity about de-risking schemes for innovations, and overall lack of confidence and predictability in Europe’s industrial policy, making it cumbersome to do business in the European Union, CEFIC said. To ensure Europe becomes an interesting place for investment, it needs a business case, as called for in the Antwerp Declaration for a European Industrial Deal.
At least the confidence in the chemical sector has been seeing an upward trend and the trade balance is recovering as destocking seems to be coming to an end. Citing projections from the European Central Bank, CEFIC states that the level of inflation is expected to fall from 5.4% in 2023 to 2.3% in 2024. Even though these are positive signs, it is too early to say if this trend is the beginning of an upcycle, the report concludes.
Some of the results are summarized in the following graphs. The full report is available on the CEFIC website.
In February 2024, the Economic Sentiment Indicator (ESI) decreased slightly in both the EU and the euro area.
In January 2024, output of the entire EU27 manufacturing sector was significantly lower in comparison to January 2023 (-5.9%).
The latest EU economic survey shows a slight increase in confidence in the EU27 chemical industry.
