After a challenging 2012, in which polymer production sank by over 3% to 19.5m t, and the fourth quarter was especially dismal, the short-term business outlook for the German plastics industry is “less rosy” than it might be, Josef Ertl, newly elected president of the German arm of the pan-European organisation, PlasticsEurope (Brussels / Belgium; www.plasticseurope.org), said at a press conference in Frankfurt.

Industry-wide sales in 2012 fell by 0.5% to EUR 25.1 bn, reflecting a 2% decline in domestic turnover to EUR 10.9 bn and a 0.8% setback in foreign revenues to EUR 14.2 bn. Producer selling prices rose by 2.9%, but employment shrank in the industry by 700 jobs or 1.8%. Capacity utilisation rates were described as “acceptable.”

Exports of plastics sank by 0.5% to 12m t valued at EUR 22.5 bn as import volumes fell by 0.4% to EUR 8.3 t worth EUR 14.6 bn. This led to an export surplus of 3.7m t or EUR 7.9 bn. Some 72% of exports and more than 87% of imports reflected trade with the EU 27. Most exports went to Italy, France, Poland and the Benelux. The latter clearly led imports, followed at some distance by France. More than a third – 34.7% – of plastics made in Germany went into packaging; 23% were sold to the building industry, nearly 10% to the automotive industry and around 6% to the E&E sector.

PlasticsEurope Deutschland blames the general economic malaise, in particular the euro crisis, for the weaker performance. In Q4, Ertl said the German economy suffered its deepest slump since the beginning of the last economic crisis in early 2009. Led by E&E with a setback of 3.5%, important customer branches lost ground averaged over the year. The building economy deteriorated by 1.7%, automotive by 0.4%. Still, Ertl said Germany is in a “considerably better” position than the EU 27 as a whole, which saw the building industry depressed by 5.3% and automotive by 2.7%.

Despite further stagnation development in Q1, plastics producers expect a modest climb in production of about 1.5% for the full year. Longer term, the industry is concerned about its continued competitiveness. Output in Germany and Europe is seen as shrinking, as the market sees a shift to the growth regions of Asia. The producers are also worried about the potential disadvantage of their lack of access to cheap shale gas-based feedstock. When cheap energy and raw materials improve business conditions in the US, the competitiveness of other economic regions deteriorates, Ertl remarked. It is not surprising, he added, that German plastics manufacturers are considering building new plants in the US.

PlasticsEurope Deutschland has urged the German government to at least allow the exploration of domestic shale gas reserves, as “a secure and affordable energy supply is an important factor in deciding where to locate production.” Most industrial firms, Ertl said, are weary of footing the bill for development of renewable energy sources. Calling price relief for energy-intensive sectors a “dictate of ecological reason,” he suggested that this would keep companies from moving their business to countries with laxer rules.

Germany is well ahead of the pack on at least one ecological count: The country tops the European list in recycling. Of the 5.4m t of waste generated in 2011, about 99% was converted into new products or incinerated for energy purposes. Thus Germany has already put into practice the head organisation PlasticsEurope’s new “zero plastics waste to landfill” pledge.