EU27 chemical production is expected to decline by about 8% in 2023 compared to the previous year, with no imminent recovery of chemical demand in Europe. This outlook applies to nearly all segments of the business, while consumer chemicals are more resilient. This is reported by Cefic, the federation of the European chemical industry, based on data for the first four months of 2023.
This economic outlook follows a weak start to the year. The first four months of 2023 have not delivered a strong recovery after the slump of production in fourth quarter of 2022. In first quarter of 2023, production volume already declined by 13,5% in comparison to the previous year.
The capacity utilisation levels of the first quarter of 2023 show levels similar to the ones seen during the first Covid lockdown in 2020. In first quarter, capacity utilisation levels are around 75% of normal levels. Demand from customers also showed a negative trend: domestic and export demand remained very weak and chemicals inventories needed to be reduced even further. Indicators for the European chemical industry still point to a further decline in incoming orders.
Commenting on the outlook, Marco Mensink, Cefic Director General, said: “The EU chemical industry is facing a perfect storm. The combination of high energy prices, lack of global demand and the US IRA means there is simply no business case for investing in Europe now. The Green Deal needs a business case in Europe. We urgently call on European leaders to make private sector investments in Europe’s industrial transformation the main priority during the next legislative cycle.”