The chemical sector posted record growth in 2017

According to the annual review of chemical companies, published by the UIC (Union des Industries Chimiques), 2017 is a memorable year marked by production volumes that increased by 4.6%. The chemical industry thus remains a major player in the French economy, ranking second in Europe after Germany and seventh among producing countries in the world.

The entire chemical industry on the rise

The chemicals sector had an exceptional year, with growth of nearly 5%. This is a remarkable figure according to Pascal Juéry, the president of the Union des industries chimiques (UIC), who points out that these results have not been observed “for more than fifteen years”.

The French chemical sector as a whole recorded an increase in results, with a rare event, a stronger increase than that observed in Germany (+2.6% in 2017). However, two sectors benefit more from this favourable context: organic chemicals (+7.5%) and soaps, perfumes and cleaning products (+8.2%), which achieved the strongest growth.

Chemicals, the leading industrial exporter ahead of aeronautics

The sector is the leading industrial exporter with export sales of 58.7 billion euros in 2017, an increase in exports of 8.5% compared to 2016. This level was achieved in particular thanks to the good domestic and international economic situation observed in the last quarter of 2017, which was marked by a 1.2% increase in foreign trade in chemicals compared to the previous quarter (after -4.2%).

Thanks to its exports, the chemical sector is taking a growing place in the country’s trade balance, with a cumulative positive trade balance of €8.6 billion in 2017 (compared with €7.5 billion in 2016). The sector thus represents the second largest industrial balance in France. In addition, while chemical prices have declined in recent years, a significant 3% increase in sales prices was recorded in 2017.

Forecasts for 2018

Despite the crisis that is hurting the rest of the secondary sector and while France’s trade deficit is still declining in 2017, chemicals are reversing the trend for manufacturing industry as a whole, with average growth since 2000 at +0.8% per year. According to UIC, 2018 is supported by an economic environment considered favourable and therefore looks promising with growth forecasts “around 3%”. However, the sector will probably not repeat this year’s achievement. Indeed, the position of France and Europe is difficult to maintain because the sector is facing competition from Asian and Middle Eastern countries, which benefit from significant markets or more competitive energy costs.