Dec. 12 (Bloomberg) -- Germany’s VCI chemical association, which represents 1,650 companies including BASF SE and Evonik Industries AG, expects a “slow” recovery for the nation’s third-biggest industry next year as domestic demand picks up.
Chemical sales are expected to gain 1.5 percent to 191 billion euros ($263 billion) in 2014 after rising a predicted 0.5 percent this year, the Frankfurt-based lobby group said today. Production next year will probably increase 2 percent while selling prices decline 0.5 percent, VCI said.
BASF and Evonik have both accelerated savings programs and cut jobs in response to slower demand growth. The VCI said today it is assuming that the domestic economy will gain some momentum and that most member companies are expecting a revival of business in coming months.
“In my opinion the global economy has bottomed out,” VCI President Karl-Ludwig Kley said at a press conference today in Frankfurt. “The German chemical industry will therefore rise in the coming year, but only slowly.”
The VCI forecasts are based on an average oil price of $100 to $120 per barrel and an exchange rate of $1.30 to $1.40 per euro, the group said.
Factories have been using an average of 84 percent of their production capacities this year, the VCI said.
The VCI last month cut for a third time its 2013 forecast for sales in the industry as selling prices dropped more than expected.
To contact the reporter on this story: Sheenagh Matthews in Frankfurt at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Thiel at email@example.com