Home News SLOW RECOVERY: Industrial Production Reflects Closely the Polymer Markets

SLOW RECOVERY: Industrial Production Reflects Closely the Polymer Markets

August 14, 2020
There is improvement but activity is far below last year.

European Union industrial production data shows a slow recovery which closely reflects the polymer markets.

The latest data from Eurostat shows that industrial production in the European Union was 11.6% lower in June 2020 compared to June 2019. While activity remains substantially below last year’s levels, it is improving. This is because the figures for April and May were much bleaker than in June.

Market feedback from the polymer industry reveals a similar pattern. While the worst in terms of demand seems to have passed, participants report that activity is still much below last year. This seems to be continuing in July and August.

As for September, there are some indications that orders are increasing. In fact, producers that have brought maintenance forward during a period of low demand are already placing some customers on allocations.

However, while a linear recovery amid an ongoing pandemic is possible, it is not necessarily certain. There are many uncertainties that could derail or flatten the current recovery in demand.

For example, infections are increasing across Europe. Therefore, the markets could suffer another major setback later this year.

What is more, an element of the recovery is probably to do with pent up demand. This element of demand will eventually disappear and could slow down the current and arguably fragile recovery.

September is a crucial month that will probably set the pace for the rest of the year. While there are clear headwinds, the markets could continue to stabilise as they have done since countries eased restriction measures. However, a strong rebound amid much uncertainty is for now the least likely scenario for the next few months.