CEFIC, the European Chemical Industry Association, said last week, due to the European debt crisis, the production of chemicals in Europe in 2012 will stop growing. Before this, the Association had forecast that the output of chemicals in Europe will grow by 1.5 percent this year. However, the European chemicals production increased by 1.3% In 2011.
In fact, this lowered expectations, the output of chemicals will stop growing rather than a negative growth this year, was expected by CEFIC ??based on more optimistic assumptions state. While reaching this conclusion, the CEFIC assumeed that the weak performance of government debt and bank in Europe will not spread in the EU Member States; It also assumeed that the United States and China, two main export markets of European companies, their economies will still have stronger growth.
Just at the end of the first quarter of this year, the head of Europe and the U.S. chemical companies also expected that the demand for chemicals would be stronger in the second half of this year, but now it seems that stronger signs don’t appear. Kevin Swift, the chief economist of American Chemistry Council (ACC), said the recent economic indicators of US. mixed good and bad; while the commercial inventory levels rose, the overall industrial production has dropped in May, and this is a second fall last 3 months.
The analysts of chemical industry also find the decline of various company’s business. Bruce Kasi Man, the chief economist of JP Morgan investment bank will also reduce his expection on the global economy growth in the second half from 2.6% to 2.1%.
Hubert Mann from CEFIC and Kevin Swift from ACC both believe that if the national economic policies can be beneficial to enhance business confidence, manufacturing grows subsequently. In addition, they also expect central banks to take further policy stimulus. Bruce Kasi Man argueed that in the current economic situation, hopes that countries can introduce effective measures is unrealistic.