UK chemical sector growth, including pharmaceuticals, is forecast at 3.6% for 2004, outstripping the more moderate 2.3% growth estimated for Europe as a whole, according to David Thomas, Head of International Industry Consulting, Oxford Economic Forecasting.
While UK sector growth is expected to fall back slightly to 3.5% in 2005, these figures represent a big increase on the 0.7% growth in 2003. Europe will see better chemicals growth in 2005 with growth forecast at 3.4%, due mainly to improved growth in Germany and France, which will only see growth of 0.7% and 2.2%, respectively in 2004.
Speaking at the CIA Business Outlook Conference in London yesterday, David Thomas noted that the key risks for Europe in his forecast will be EU regulation and a stronger Euro, continued investment flight to the developing world, further restocking and the general economic recovery.
The economic recovery forecast for 2004 will be slower in Europe than in the US and Asia with a later peak. GDP will grow by 1.9% in Europe compared with 4.6% in the US and 6.4% in Asia, excluding Japan. Within Europe, amongst the four biggest economies, the UK is expected to see the highest growth in GDP, 2.9% compared with 1.3% for Germany, 1.5% for France and Italy; however, Spain will see 3.1%. World GDP growth is forecast at 3.5%.
The US chemicals sector is expected to see 3.6% growth in 2004, up from 0% in 2003, falling back to 3.1% in 2005. Thomas sees Japan’s chemical business recovering slowly, with 1.4% growth in 2003 and 1.8% in 2004. However, Thomas said that it will gathering momentum in 2005 to reach a similar growth rate to the US.