EU chemical industry confidence on the rise

Europe is more affected by the energy crisis than other regions and structural issues need to be addressed, the European Chemical Industry Council (CEFIC) said in its March chemicals trends report.

The chemical industry of the 27 EU countries is gradually losing its competitive advantage in the global market. As an energy-intensive industry, high energy costs are the Achilles heel of the chemical industry, especially compared with the United States and the Middle East where energy costs are lower.

However, energy costs are not the only factor, according to CEFIC. CEFIC said the stagnant investment in Europe could also be attributed to regulatory uncertainty, unclear plans to de-risk innovation and an overall lack of confidence and predictability in European industrial policy, which makes doing business in the EU difficult. To ensure that Europe remains an interesting place to invest, it needs a business case, as required by the Antwerp Declaration on a European Industrial Deal.

Confidence in the chemical industry, at least, has been trending upward and trade balances are recovering as destocking appears to be coming to an end. Inflation levels are expected to fall to 2.3% in 2024 from 5.4% in 2023, CEFIC said, citing European Central Bank forecasts. While these are positive signs, it is too early to say if this trend is the beginning of an upcycle, the report concludes. The full report is available on the CEFIC website.