European chemical output to grow this year

Output from the European chemicals industry, excluding pharmaceuticals, is expected to grow by two per cent for the full-year 2014. This is according to the European Chemical Industry Council (Cefic), which indicates the rise reflects the wider economic recovery currently being evidenced across the majority of the eurozone.

With demand from customer industries - vehicle manufacturers in particular - rising steadily and stabilisation evident across the construction sector, production is set to expand over the coming months and into 2015.

This follows a small decline in output in 2013, which was attributed to the industry's attempts to deal with the second part of the double-dip recession that blighted the continent following the global financial crisis of 2008. Having dropped by more than a fifth, chemicals output has yet to recover the peak recorded prior to this event.

Kurt Bock, president of Cefic, said: "We now expect a long-awaited return to growth in output by the European chemical industry this year."

However, Mr Bock tempered this prediction by noting the Eurozone's economic recovery is fragile, with policymakers from the European Central Bank introducing stimulus measures at the start of June in an effort to prevent the region sliding into deflation.

While businesses may be able to benefit from the enterprise finance scheme announced by ECB president Mario Draghi and the negative deposit rate designed to encourage high street banks to lend, the expert highlighted other issues facing producers in Europe, including higher energy prices in comparison to the middle east and North America.

According to its bi-annual industry forecast, Cefic now believes the chemical industry recorded contraction of 0.2 per cent in 2013. This is down from the original estimate of 0.5 per cent presented in the previous report. It is estimated the sector will continue to expand in 2015, though the pace of growth is anticipated to slow to 1.5 per cent.

In addition, the organisation is confident of progress in the wider economy, highlighting positive purchasing managers' index results in recent months and suggestions that Europe's industrial growth is beginning to broaden.