Air Liquide SA, the world’s largest producer of industrial gases, said demand from major manufacturers is returning to normal after Europe’s debt crisis prompted them to hold off investment and draw down inventories.
“The past four months can be clearly divided into two halves,” Air Liquide Chief Executive Officer Benoit Potier told journalists in Paris today. “In the fourth quarter there was huge uncertainty and that really weighed on business. China cut back for three months, waiting to see what would happen in Europe and China’s role is key.”
The euro-area economy shrank in the fourth quarter and China’s gross domestic product rose at the weakest pace in more than two years as European policy makers struggled to contain the sovereign debt crisis. Air Liquide’s own sales slowed then as like-for-like revenue from gas and services units climbed 1.9 percent, compared with 7.5 percent in the year as a whole.
“What was striking was the decisions taken by the big industrial companies, the makers of steel and electronics, ” Potier said. “They closed their taps. Now they’re starting to come back.”
Concern about European governments’ ability to pay their debts has eased since December, when the European Central Bank began providing three-year loans to banks. The ECB loaned euro-region banks a record 489 billion euros ($643 billion) for three years on Dec. 21, adding liquidity and helping borrowing costs decline for countries including Italy, Spain and France.
“Now, very recently, we’re back into normality,” Potier said. “It’s as if the worry about the euro is behind us. That’s how we feel it.”