"France Information Technology Report Q4 2013" now available at Fast Market Research
Fast Market Research recommends "France Information Technology Report Q4 2013" from Business Monitor International, now available
[UKPRwire, Wed Oct 23 2013] With domestic GDP growth of -0.3% forecast in 2013 and external markets set to remain in the doldrums, BMI sees little grounds for optimism for the French petrochemicals sector in H213, although a slow recovery is expected from 2014. In the medium term, the sector will struggle to recover fully from the precipitous decline in the aftermath of the 2008 financial crisis. With the eurozone sovereign debt crisis weighing heavily on the sector and undermining growth in both external and domestic markets, BMI does not envisage any rapid return to pre-crisis levels of output in the near future.
In spite of a reduction in basic chemicals capacity since the 2008 financial crisis, the French chemicals industry enjoyed growth in sales during 2012 amid rising value added, which has been driven by increasing investment. In 2012, the French chemicals industry reported a 2.5% rise in turnover to EUR88.9bn on the back of a 2.0% rise in exports to EUR55bn and 2.7% growth in the domestic market to EUR84.5bn. Imports rose 2.2% to EUR50.6bn, leading to a 1.4% reduction in the chemicals trade surplus to EUR4.37bn. Investment amounted to 4.1% of turnover in 2012, totalling EUR3.7bn.
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However, in the first five months of 2013, French chemicals, plastic and rubber output declined by an average of 3.4% y-o-y with producers struggling with declining orders amid a slump in demand both at home and in key export markets. This reversed gains seen in 2012, when the chemicals industry saw turnover rise 2.5%.
Over the past quarter BMI has revised the following forecasts/views:
* The automotive industry - a key polypropylene (PP) consumer - saw output decline by an estimated 13.2% in 2012, according to BMI's Automotives team. Vehicle production is set to decline by a further 10.6% in 2013. The automotive sector output will remain lacklustre with slow levels of growth unlikely to return the sector to pre-recession levels as the industry experiences structural change.
* Construction contracted 0.4% in 2012, depressing demand for polyvinyl chloride (PVC). Recovery is unlikely in 2013 and we anticipate construction industry value to contract by 1.9% in real terms over 2013.
* France scores 73.5 points in BMI's petrochemicals ratings, unchanged since the previous quarter. France remains in third place, 0.4 points behind the Netherlands and 1.0 point ahead of Belgium. France's score has been undermined in recent quarters by relatively poor long-term financial and external ratings as well as the effects of strike action on the market risk environment. France's score is in danger of being further eroded by capacity shutdowns, although its situation is not unique in Western Europe.
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