Outlook for the Chemical Industry
Global chemical production (excluding pharmaceuticals) is expected to grow by 2.0% in 2023, slower than in the previous year (2022: +2.2%). We again anticipate a decline in production in the advanced economies (2023: –3.0%, 2022: –2.9%). Growth in the emerging markets is expected to slow slightly (2023: +4.4%, 2022: +4.8%).
In China, the world’s largest chemical market, we are forecasting slightly weaker growth in chemical production of 5.9% (2022: +6.6%). We expect the opening of the Chinese economy to bring with it higher growth in Chinese domestic demand, especially in the consumer goods industries and the health and nutrition sector, as well as positive contributions to growth from the automotive and electronics industries.
Chemical production in the E.U. should again decrease by 5.2% (2022: –5.8%), well below the overall industrial development forecast for Europe. Due to the high energy costs, no major catch-up effects are expected in energy-intensive basic chemicals following the already strongly negative prior year. Growth should mainly be driven by demand from the automotive industry. By contrast, consumption of durable and non-durable consumer goods is not likely to increase. We also expect chemical production in the United Kingdom to continue to decline (2023: –5.5%, 2022: –5.0%).
In the United States, the positive base effects that supported growth in 2022 will come to an end. Domestic demand will largely stagnate, with the exception of the automotive industry, the energy sector and the electronics industry. Demand from the construction industry is expected to decline on the back of high interest rates. Export demand for chemicals from Europe should provide positive momentum given the lower raw materials and energy prices. Overall, we expect a slight decline in chemical production (2023: –2.0%, 2022: +2.3%).
For Japan, we are forecasting a weak recovery after the decline in the previous year (2023: +1.0%, 2022: –3.0%). Growth stimulus here is expected to come primarily from the automotive sector.
South America will presumably see much lower growth in chemical production (2023: +0.9%, 2022: +2.6%). Demand from the consumer goods industries is expected to grow at a similarly weak rate to GDP. By contrast, we expect demand from the agricultural sector to increase more strongly and demand from the automotive industry to remain solid but with weaker growth than in the previous year.