German chemical industry hails strong start to 2018

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Germany's powerful chemicals sector booked a strong first quarter as global growth fired demand, an industry federation said Wednesday, but it warned of lurking risks from trade wars and other political upsets.

In the first three months, revenues in the sector grew 5.7 percent year-on-year, to around 51.1 billion euros ($60.5 billion), while production was 6.7 percent higher, the Federation of the Chemical Industry (VCI) said in a statement.

"Our firms are still mostly confident that the upwards trend in the chemicals business will continue this year," VCI president Kurt Bock said.

But he added that "risks to the business cycle have increased", checking off potential trade wars between the US, China and the European Union, lacking progress in Britain's EU exit talks, and smouldering crises in the Middle East.

Nevertheless, the VCI confirmed its March forecast of 4.5 percent growth in revenues in 2018, to around 204 billion euros.

Looking at the first quarter more closely, firms' sales to customers in Germany grew 3.7 percent, while exports added 7.0 percent.

The expansion in cross-border business was powered especially by 11.6-percent growth in sales to the nation's nearest neighbours in the so-called EU15 like France, the Netherlands or Italy.

North America was the only region worldwide to buy less German chemicals than at the start of 2017, shedding 3.2 percent.

Pharmaceuticals firms saw the most spectacular first-quarter growth, at 16.2 percent year-on-year, while other types of chemicals added 2.5 percent.

Germany's third-largest industry by revenue after car production and machine tools, the chemical and pharma sector employs around 455,000 people in Europe's largest economy.

It is made up of companies ranging from small- and medium-sized "Mittelstand" firms to global giants like Bayer, BASF or Merck.

© 2018 AFP

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