5.5% yoy decline in chemicals output in UK in Q2-12

31-Oct-12
In H1-12, the UK’s chemicals and chemical products index saw a steady decline as the country headed into recession. BMI estimates that chemicals output declined by 5.5% year-on-year (y-o-y) in Q2-12 and the situation has deteriorated markedly since. The trends were in line with expectations of a double-dip recession in the chemical industry and with broader economic trends. The report does not preclude the possibility of a return to 2010 rates of output or worse, with the recovery seen in 2011 wiped out. The size of the impact of a downturn on the chemicals industry will depend on the strength of pound sterling and the weakness of export markets. BMI has revised the following forecasts/views: - Overall trends in manufacturing and exports point to a slump in output over the rest of 2012. Coupled with refinery capacity closure that will impact on domestic naphtha availability, there is a threat that the recession will have a long-term impact on the British chemicals industry. - With surplus capacity likely to be a feature across Europe in 2012, the UK’s competitiveness will determine the size of contraction; BMI envisages a decline in competitiveness in the labour force as well as a steady appreciation of the pound sterling against the euro. - Naphtha prices have been volatile and temporary weakening oil prices are not being passed on through the downstream value chain; British producers are likely to remain sceptical of any talk of a sustainable downtrend in feedstock costs. The report examines the effects of the eurozone crisis coupled with increased competition from Asia and the Middle East, opening the way for the UK to be increasingly import dependent in any future economic recovery.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha