Recovery imminent, CIA conference told

The European chemicals industry is set for a recovery this year, according to Oxford Economic Forecasting's Dave Thomas. Addressing the UK CIAÕs annual business outlook conference at the end of January, he said that the UK chemical sector is forecast to grow at 3.6% this year, outstripping the forecast of 2.3% for Europe as a whole. Next year is predicted to be even better, as France and Germany stage a recovery.

The US is set for a much better year: a predicted rise of 3.6%, compared with last year's zero growth. And a slow recovery in Japan is likely to accelerate in 2005.

The pharma sector is much less dependent on the ups and downs of the economic cycle, and market size tends to be more stable. However, Thomas claims, the factors that give global stability also make it extremely difficult to forecast. 'So much is subject to pharma-specific factors, such as "where will GSK source from?"' he says. 'And so much depends on product launches - and where they are made.'

Patent expiry has less of an influence on demand for global pharma ingredients and intermediates; however, it makes a difference to individual countries, as new entrants to the market source from other suppliers in other countries. 'It's impossible to give a world forecast because it is difficult to get data from developing regions,' he says. 'But Singapore, Mexico and other territories near the US are growing rapidly.' He expects overall western European output to rise by 4.5%.