German Chemicals Sector Sees Flat 2012 After Weak Q1

German chemical makers saw a decline in production during the first quarter and underlined a forecast of stagnation for 2012, the industry federation VCI said Thursday.

Production in one of the key sectors of Europe's top economy rose 1.5% compared with the last three months of 2011, but a year-on-year comparison revealed a 4% decline.

Sales in the first three months of 2012 also dropped 1.5% compared with the same period last year with a fall in exports.

The German chemicals industry employs around 437,000 people, with annual sales of more than 184 billion euros ($238 billion).

As about 60% of what it produces is exported, the sector is particularly vulnerable to eurozone weakness.

VCI president Klaus Engel said production volume is likely to be flat for the whole of 2012 while sales will rise 1% to 186 billion euros due to an increase in prices.

"Company's order books are filling up again," Engel said.

"Economic indicators give us reason for confidence. [But] the debt crisis is slowing our economic growth in the E.U. and thus the recovery in what is by far our most important export market."

Copyright Agence France-Presse, 2012