The European chemical industry, the world's biggest chemicals exporter, expects to grow more rapidly in 2006 than this year. This bodes well for the health of global manufacturing, as most industries use chemicals, according to the European Chemical Industry Council.
The organization predicts growth of 2.3% in 2006, compared with just 1.6% in 2005. The chemical industry saw a rise of 2.6% in 2004. The drop from 2004 can be attributed to a fall in foreign demand. In 2005, domestic demand in Europe could not compensate for the fallback. In addition, high crude oil prices put pressure on private consumption, so industrial production was weak.
This year saw a sharp increase in production for basic chemicals, especially petrochemicals and inorganics production. But specialty and fine chemicals activity decreased as a consequence of weaker global demand, intensive international competition and cost increases in especially oil.