Trends in Key Customer Industries

• Weak development of global industrial production
• Stronger declines in global automotive production

Global industrial production grew by only 1.5% in 2019, roughly half as strongly as in 2018 (+3.1%). Production declined overall in the advanced economies (2019: –0.5%, 2018: +1.8%). Growth in the emerging markets weakened considerably (2019: +3.4%, 2018: +4.4%).

Industrial production was largely stagnant in the E.U. (2019: –0.3%, 2018: +1.4%) and the United States (2019: –0.1%, 2018: +2.7%). By contrast, this declined in Japan (2019: –1.7%, 2018: +0.8%) and South America (2019: –1.3%, 2018: +0.5%). The gradual slowdown in China continued, with industrial growth declining from 5.8% in the previous year to 5.7%. In the remaining emerging markets of Asia, growth fell from 5.3% to only 2.6%. One of the key drivers here was below-average momentum in India (2019: +3.9%, 2018: +6.0%).

Most of the chemical industry’s key customer sectors turned in a much weaker performance than in the previous year: Global automotive production declined by 5.4% (2018: –1.1%). Around 5.1 million fewer cars and light commercial vehicles were produced worldwide. Production declined in all major economic regions, but most notably in China (–8.0%). The downturn in the E.U. (–4.2%) and North America (–4.0%) continued as well. Alongside complications from the introduction of new emission standards, market weakness was due to the shift to electromobility, the associated higher vehicle costs and the still inadequate charging infrastructure in many places. In India, production fell by 11.0%; in South America, this declined by 4.2% overall. Only Brazil recorded weak growth of 0.8%. At 2.0%, growth in the construction industry was comparatively solid but still much slower than in 2018 (+2.8%). A significant contributing factor here was the drop by around 10% in the U.S. housing market. Overall, construction activity in the United States declined by 4.6% (2018: –1.3%). Higher spending on infrastructure was unable to offset the decline in housing development. In the E.U. (2019: +2.8%, 2018: +3.4%), the construction industry benefited from the low interest rate environment, tight housing markets in urban areas and growing demand for energy renovation. The eastern E.U. markets performed particularly well (+6.9%), while growth in the western E.U. countries was more subdued (+2.4%). In Asia, growth in the construction industry weakened only slightly (2019: +3.9%, 2018: +4.0%). As in 2018, the South American construction industry was largely flat. Agricultural production grew by 2.4%, on a level with 2018 and thus below the long-term average of around 3%. In the United States, planting was negatively impacted by unusually strong rain in the spring. The trade conflict between the United States and China also reduced agricultural exports from the United States to China, such as soybeans. In this environment, U.S. agricultural production declined by 1.5%. By contrast, production expanded by 3.4% in South America. Argentina recorded particularly strong growth (+15.4%); however, output there had declined by 14.3% in 2018 due to drought. As in the previous year, agricultural production stagnated in Europe (2019: –0.1%, 2018: +0.0%). In Asia, the growth rate was roughly on a level with the previous year, at 3.3% (2018: +3.5%).

Growth in key customer industries

Real change compared with previous year