Brussels – Chemical output in the European Union dropped by 5.2% year-on-year in the six months to end of June, according to the latest quarterly report by the European Chemical Industry Council (Cefic).
The decline was mostly attributed to the slowdown in demand after the outbreak of Covid-19 pandemic across Europe, but Cefic said it could see “first signs of recovery” within the industry.
June data reported a 2.9% output growth in production compared to May, but still about 9% below the pre-crisis level of February.
According to Cefic, output has continued to recover gradually, and April’s bottom-level “is hopefully behind us.”
“The EU chemical industry has been severely hit by the current economic downturn during the Covid-19 outbreak, [but] we are now encouraged to see some first, although very modest, signs of recovery in the European chemical output,” said Marco Mensink, Cefic director general.
However, the association warned that the “spill-over effect” of the crisis will continue to appear for a while.
“It is clear that the impact of the crisis varies between the sectors of the chemical industry and the overall decline in cross-sectoral manufacturing activity, including automotive and refining, is likely to affect the pace of some investments,” said Mensink.
Breaking down the output data, Cefic said that among the largest European countries, France and Italy were most impacted by the crisis with production falling at least 12% year-on-year during the first half of 2020.
Spain and Portugal reported a drop of more than 6.5%, while Belgium and The Netherlands registered a decrease of about 6% during the same period.
Germany's output fell 3.6%, while Poland posted a relatively small decline of 1.7% in first half output.
Outside the EU perimetre, the UK reported a drop of 6.2% in chemical production.
Total sales (domestic and exports) in the EU27 chemical business posted a value of €202.2 billion for the first five months of 2020, 7.9% below the previous year’s level.
Cefic attributed the lower sales to the weak domestic demand in Europe and the deterioration of trade business environment.
Globally, Cefic said chemical output declined by 3.4% in the first half of 2020 compared to the same period of 2019.