German exports up, but home market is still weak
15 Jan 2000
Foreign demand, aided by the weakness of the German mark, helped the German chemical industry increase its output by 4.9 per cent between January and May, according to the industry association, VCI. Growth for the full year should be about 4 per cent, as long as exports and domestic demand stay high, it predicted.
The rise belies the continuing weakness of domestic demand, especially for products near to the market. BASF chairman Jurgen Strube, speaking at his company's interim results presentation (see page 5), said that the industry needed an increase in consumer confidence to stop Germany from being a cause for concern.
German companies are pinning their hopes on the continuing strength - and accompanying demand - from the US economy. Exports to the US rose by 22.7 per cent, almost entirely due to volume, rather than price, increases. Overall, in fact, producer prices slipped by 0.1 per cent, a trend that began in 1995.
Employment levels in Germany are also falling, with new restructuring programmes beginning to bite. Average employment in the industry over the period was around half a million, down 2.9 per cent on the same period last year.
