CIM-report for early Summer 2012: chemical industry continues to rely on investment
The global Chemistry and Plastic industry is optimistic, despite the continuing European Debt Crisis and the worldwide economic decline. Companies interviewed by Ceresana Research declare themselves satisfied with the current demand at home and from abroad, every third company is even planning an increase in production volume.
Stable demand and increasing production volume
The global Chemistry and Plastic industry continues to be optimistic. Over 42% of responding survey participants expect an improvement of their business situation in the upcoming six to twelve months. This is mainly due to a stable demand on both domestic and foreign markets. More than a third of the interviewees are rating the current demand at home as ‘good‘. The same is true for 30% of the companies with regards to demand from abroad.
Over half of the companies rating demand for their products as ‘good‘ are intending to capitalize on the good initial position and increase their domestic production volume. Further, 44% of the panel members expect to be able to increase their export volume in the next twelve months. Slightly less are assuming a constant export volume and only 6% are anticipating a decline. More than two-third of the companies looking to increase their export volume also expect an improvement of their business situation in the upcoming twelve months.
Additional costs are to be absorbed by consumers
Over 60% of the companies believe that prices for raw materials and preliminary products will rise in the next twelve months. Especially countries in Eastern Europe are expecting rising prices. Here, more than 70% of interviewees are anticipating an increase.
Additional costs generated by price increases in raw materials and preliminary products are passed on to consumers by the companies. Over 70% of panel members stated to intend to shift additional costs to the consumer by raising own prices. With a significant gap follow the change of suppliers for 24.5% and reduction in storage for 17.7% of participants as possible solutions.
Worldwide investment increases
Another factor to ensure stability for future development are investments undertaken by the companies. A large number of companies has executed investment in the past. Further investment, especially in expansion, replacement and renewal, are envisaged. Often, investments are also made in areas such as innovation of products and processes, marketing and sales as well as personnel. Investment in sustainability and IT-systems is only planned by 17.1% and 15.9% of panel members respectively.
Companies rely on external market research
Concerning their strategic planning, companies mainly utilize information provided by external market research institutions, while only every fifth company relies on business consultancies. External information is mainly used for development of new products and competitor analysis in the market. Around two-thirds of the companies that obtain their information from market research agencies also rate their current business situation as ‘good‘. This ratio is even more significant regarding the expectations. More than 70% of the companies utilizing external market research institutions are expecting an improvement of their business situation during the upcoming six to twelve months.
CIM-barometer stands at 13.3 points
Ceresana established a value of 10.2 points for the current situation of companies. This constitutes a slight decrease of the evaluation of the business situation by companies in comparison with the previous survey (13.9 points). Expectations, however, score somewhat better with 16.4 points (15.2 points in Spring). The resulting CIM-barometer for the global business climate experienced a slight decrease from 14.5 points to 13.3 points when compared to the Spring survey.
Methodology and panel members
The early summer survey of the Ceresana Industry Monitors was conducted from 23.04. until 13.05.2012. Interviewed are companies and association of the chemical and plastic industry on a two-monthly basis. The survey was answered by decision-makers in 47 countries. In order to provide a representative picture, companies of all sizes were asked about their current business situation and expectations.
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