European Chemical Industry: Cefic Chemicals Trends Report (CTR) Cefic Industrial Policy Programme 1 March 2018 Dr Moncef HADHRI, Cefic Industrial Policy, Economic Affairs, mha@cefic.be

The world business climate reached its highest level since autumn 2007 ifo World Economic Climate Improves Considerably Munich, 14 February 2018 – The ifo World Economic Climate has improved considerably. The indicator rose in the first quarter of 2018 from 17.1 to 26.0 points, soaring to its highest level since autumn 2007. Experts assessed the current economic situation far more positively than last quarter. Their economic expectations also showed an exceptional improvement. The worldwide upswing consolidated in the first quarter. The climate improved in all regions of the world. Both assessments of the current economic situation and expectations rose particularly sharply in the USA, the European Union and in emerging and developing countries in Asia. In Latin America assessments of the current situation improved significantly, but expectations deteriorated slightly. According to experts, short and long-term interest rates will rise in the next six months. They expect world trade to pick up significantly. The price level increase in the world economy is expected to gather impetus in the months ahead.

The climate improved in all regions of the world. For long time-series in Excel format consult www.cesifo-group.de/langereihen. Since 1981 the ifo Institute has conducted a quarterly survey in numerous countries on business cycle developments and other economic factors in the experts’ home countries. The January 2017 survey received responses from 1,199 experts in 120 countries. A detailed regional analysis appears in the quarterly journal: ifo World Economic Survey. This press release contains advance information on the most important results. Both assessments of the current economic situation and expectations rose particularly sharply in the USA, the European Union and in emerging and developing countries in Asia. In Latin America assessments of the current situation improved significantly, but expectations deteriorated slightly.

The EU chemicals output is for the first time above its pre-crisis level Chemicals confidence improving Chemical output at its highest level for 22 years (since 1995) Producer prices were 5.1% above the previous year’s level. Capacity utilisation at its second highest level since Q1-2011; 3,5% above its long long-term average Total sales (domestic sales and exports) develop favourably Chemicals consumption rises 8.6% during first eleven months of 2017 (y-o-y) Chemicals exports up by €9.6 billion through November 2017 (y-o-y) Trade surplus up by €2,2 billion through November 2017 (y-o-y) Employment improves further in Q3- 2017

Chemicals* business climate improving *Chemicals excluding pharmaceuticals (Nace 20) The chemical business situation at present became more favourable in the fourth quarter of 2017 compared to the previous quarter of the same year. Prospects for the coming months and total order-book levels of chemicals were, also more positive. The chemicals business climate improving in Q4-2017. Last but not least, chemicals confidence is still above the long-term average.

Chemical output at its highest level since 1995 Output in the EU chemicals sector grew 3.6% from January to December 2017 (y-o-y), Output in Q4-2017 was 0.3% above the peak level before the crisis (Q1-2008)

2017: Basic inorganics and consumers chemicals 2017: Basic inorganics and consumers chemicals* performed better than the other sectors *Production figures on chemicals sectors are not comparable; they did not have the same degree of country coverage.

Capacity utilisation at its second highest level since Q1-2011 *Chemicals excluding pharmaceuticals (Nace 20) Capacity utilisation is 3.5% above the long-term average It is the second highest level since Q1-2011 (peak level after the crisis)

Spain and UK recovered significantly during the post-crisis period *Chemicals excluding pharmaceuticals (Nace 20)

The number of jobs in the chemicals* industry went up in Q3-2017 *Chemicals excluding pharmaceuticals (Nace 20)

Chemicals exports up by €9.6 billion through November 2017 (y-o-y) *Chemicals excluding pharmaceuticals (Nace 20)

Trade surplus* up by €2.2 billion (Jan-Nov-17) *Chemicals excluding pharmaceuticals (Nace 20) The net trade surplus was €44.5 billion during first eleven months of 2017. The largest EU chemicals surplus is occurred with rest of Europe. The EU chemicals registered a trade deficit (value) with South Korea, India, and Japan. Specialty chemicals and consumer chemicals contributes largely to the surplus

Appendix

The net trade surplus was €44.5 bn through Nov-17 (additional €2.2 bn)

Summary of Key findings*: Top Indicators *Chemicals excluding pharmaceuticals (Nace 20)

2017 output growth: the highest one over the past 10 years

Chemicals* output growth (year-on-year) *Chemicals excluding pharmaceuticals (Nace 20), production figures on chemicals sectors are not comparable; they did not have the same degree of country coverage,

Chemicals* prices growth (year-on-year) *Chemicals excluding pharmaceuticals (Nace 20), prices figures on chemicals sectors are not comparable; they did not have the same degree of country coverage,

Chemicals* sales broken down by sub-sector *Chemicals excluding pharmaceuticals (Nace 20)