Chemicals production in Europe tracks mixed trajectories

LONDON (ICIS)–Chemicals production in Europe presented a mixed picture in November, with growth and contraction recorded in the region’s key manufacturing countries, according to the EU’s statistical agency Eurostat on Friday.

The industry faced pressure from inflationary pressures and soaring energy costs in response to the war in Ukraine, but as storage levels across Europe held steady at high levels, prices eased.

Country/Region	November	October	September
Eurozone	0.2	-4.7	-1.1
EU	0.0	-3.9	-1.6
Germany	3.3	-6.9	-2.7
France	0.4	-5.5	-1.0
Spain	1.0	-0.4	-1.6
Italy	-2.9	3.7	1.0
Netherlands	-2.7	-4.8	-1.8
Poland	3.8	3.2	-13.4

“An energy-intensive business, the chemical industry has been severely hampered by the energy supply shocks and supply disruptions of 2022. Fears of severe output curtailments have been allayed with the warm winter thus far,” said ICIS Senior Economist Kevin Swift.

Overall industrial production rose by 1.0% in the eurozone, and by 0.9% in the wider EU compared to a month prior, with growth tracking 2% for both regions compared to November 2021.

“While the industrial sector remains an area of weakness for the eurozone as it continues to face several headwinds, the recent sustained drop in commodity prices together with supply constraints continuing to ease could result in an industrial recession shallower than initially feared,” said analysts at Oxford Economics.

“This reinforces our view that while an industrial recession is underway, its magnitude is likely to be far less than what we expected few months ago with the eurozone expected to face a difficult but not extremely negative year.”