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Nov 6, 1978 - Eng. News , 1978, 56 (45), p 17. DOI: 10.1021/cen-v056n045. ... ACS Chem. Eng. News Archives ... 6 November 1978. C&EN Online News...
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European chemicals show expected sag The pattern of the chemical production indexes for France and West Germany between May and August follow the same general trend this year as last. In both countries there was a rise from May to June, followed by a fairly sharp drop in July and August. There is nothing particularly sinister in this drop. It reflects more a general slackening in the overall pace of industrial activity throughout continental Europe during the summer vacation period than any sudden and widespread slump in business confidence. In the case of France, the slippage between June and July this year amounted to 10.8%. This was followed by a further drop of 17.3% between July and August. Overall, August's production index value of 117.7 (1970 = 100) was 26.3% below that for June last year. Last year, the June-through-August downturn amounted to 25.3%. Somewhat offsetting this gloomy picture is that France's chemical production index level this past August was 3.5% ahead of that for August 1977. Industry analysts in West Germany can gain some solace from the fact that the extent of the drop there this summer was less than it was in 1977. This year's August chemical production index value of 126.6 (1970 = 100) was 11.8% less than June's. In 1977, on the other hand, the differential amounted to 15.3%. Too, the August 1978 chemical production index level was 6.8% higher than 12 months earlier. In the U.K., chemical output on the whole rose 1% in August from July, compared to a 2% rise last year. Nevertheless, the production index value of 121 for this August (1975 = 100) was 3% higher then it was a year ago. Moreover, the overall upward movement of the production index between January and August amounted to 7%, almost double the 4% rise in the corresponding 1977 period. Prices continue to firm in France and the U.K. The improvement in the price index for France between August 1977 and August 1978 was just short of 10%. During the same period in the U.K., the rise was nearly 6%. But West Germany seemingly can't shrug off the downward drift of prices. It appeared last March and April that the trend had reversed itself. But further price erosion followed. By August, the latest month for which data are available, the country's chemical price index was 1.5% less then it was in August of last year. At the annual general meeting of the West German Chemical Industry Association (Verband der Chemischen Industrie) in Hamburg, Dr. Matthias Seefelder, the organization's president, referred to unsatisfactory profits as "the most important development" of the industry in West Germany right now. "Profits during the first half of the year were 10% lower than the corresponding 1977figure,"claims Seefelder, who also heads BASF. Other figures he presented point up the difficulties currently facing the chemical industry not only in his country but throughout Western Europe generally. During this year's first three quarters, the volume of chemical production in West Germany grew 3.5%, but sales advanced only 1.4%. During the same period, production costs rose 3.4%. As part of the effort to offset rising costs, the number of chemical workers was reduced 1% to about 553,000. The strengthening of the deutsche mark against other major currencies, especially against the U.S. dollar, is an additional handicap for West German chemical makers. Right now, fewer than 1.8 marks is equivalent to $1.00, compared to about 2.3 marks a year ago. The result of this shift is that West German chemical exports cost importing countries more than they did previously, and chemical imports into West Germany have a greater competitive edge. However, as Seefelder points out, "Competitors from abroad save the situation by increasing their import prices." D

France Chemical production index

Chemical price index

West Germany Chemical production index

Chemical price index

Note: Base year for France and West Germany indexes is 1970·-= 100; for U.K., 1975= 100.

Nov. 6, 1978C&EN

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