Outlook for the Chemical Industry

• Above-average growth expected in the chemical industry

Global chemical production (excluding pharmaceuticals) is expected to grow by 4.4% (2020: –0.4%) in 2021, which is above average for the years prior to the coronavirus pandemic. This growth should be seen predominantly in emerging markets (2021: +5.4%; 2020: +1.8%). In advanced economies, we anticipate a growth rate of 2.5% (2020: –4.2%), which is above average for pre-crisis years. The level of production from 2019 will thus already be surpassed in 2021 in emerging markets. Overall, production in advanced economies will presumably still be considerably lower.

In China, the world’s largest chemical market, we are forecasting a growth rate in chemical production of 6.3% (2020: 3.4%). Momentum is likely to slow down after the rapid recovery in production in 2020. Nevertheless, we anticipate demand across all customer industries to grow for intermediate inputs from the chemical industry, in particular consumer goods and in the automotive industry.

In the European Union, we are forecasting an increase in chemical production of 3.2% (2020: –1.9%), roughly in line with GDP growth. The expected marked recovery in the automotive industry along with moderate growth in the construction industry and in consumables in the health and nutrition sector, as well as somewhat stronger growth in consumer durables should bolster domestic chemical demand. We anticipate weaker growth momentum in the United Kingdom. Higher transaction costs are likely to dampen chemical production due to the end of the Brexit transition period and the negative economic impact of the coronavirus pandemic (2021: +2.0%; 2020: +1.0%).

We expect chemical production in the United States to grow by 2.6% (2020: –4.3%). Further recovery in automotive production and considerable growth in health and nutrition and in electronics should have positive effects on chemical demand, whereas the construction and oil and gas industries are only expected to provide weak growth stimulus.

In Japan, we anticipate moderate growth in chemical production, analogous to the modest overall economic recovery.

In South America, chemical production will presumably lag slightly behind the economy as a whole (2021: +3.0%; 2020: –1.1%). Chemical growth will be buoyed by the recovery in automotive production, as well as in the agriculture, nutrition and industrial raw materials sectors.

Outlook for chemical production 2021 (excluding pharmaceuticals)

Real change compared with previous year

Trends in chemical production 2021–2023 (excluding pharmaceuticals)

Real change compared with previous year