German chemical industry sees growth ahead in 2017

The industry body for Germany's powerful chemicals sector on Wednesday forecast a pick-up in growth for 2017, after a strong first quarter stoked by increased demand at home and abroad.

The chemical industry federation VCI hailed a 1.1-percent increase in production and a 2.8-percent rise in prices between January and March compared with the same period last year. It was the first time in a year that production had increased, VCI noted.

Both factors combined contributed to "significant" revenue growth of 3.8 percent over the first quarter of 2016, to 47 billion euros ($51 billion), it said.

Domestic demand from industry and construction swelled in the first three months, the federation highlighted, while exports to Europe, Asia and North America also expanded. Nevertheless, "one swallow does not make a summer," cautioned VCI president Kurt Bock.

"After the satisfying start, we'll have to wait and see whether the positive development continues. There are many unpredictable economic factors and political risks that could hamper the upturn." Higher oil prices, the impact of Brexit on the German and European economies, and economic weakness in South America could all put the brakes on growth, the federation warned.

VCI expects revenues in the industry to grow by around 3.5 percent to 191.2 billion euros over the full year, on the back of a 1.0-percent increase in production and rising prices.

2016 was a difficult year for chemical producers, with output remaining almost flat over the year while revenues fell back 3.0 percent.