The most recent Atradius’ “Market Monitor: Focus on Chemicals Performance and Outlook” rates countries from “excellent” to “fair.” Although the industry appears steady, the report warns that change is likely imminent—especially for businesses in the European chemical sector. An increase in global competition along with the abundance of U.S. natural gas has impacted sales prices worldwide.
“European and other chemicals businesses have to face the fact that the U.S. share of global capital investments in the chemical industry has constantly increased over the past couple of years,” the report states. “While the U.S. petrochemicals and energy-related chemicals subsector currently face some problems due to the lower oil price, it seems that in the longer term the U.S. chemicals industry may gain a major competitive edge.”
For now though, the European sector remains relatively stable; in fact, the industry in France is growing. According to the report, French chemical production is expected to increase 2% this year and the willingness of banks to provide credit to this sector is marked as high.
In Germany, the chemicals industry—the largest in Europe and fourth largest in the world—is growing in production, yet falling in sales. This country is dependable with payments, typically paying on an average of 45 days. “We have seen no change in payment behavior or increase in notifications of nonpayment in the last six months and expect this pattern to continue in the coming months,” Atradius noted.
In Spain, 57% of revenues in the chemical sector are from exports. Since 2000, the sector has increased its exports by more than 170%. Payment typically takes on average 60 days; however, it is likely that some companies will take more than 75 days to pay.
To read the full report, please visit the FCIB Knowledge and Resource Center.
- Jennifer Lehman, NACM marketing and communications associate