German aluminium industry expecting slight economic downturn in 2019Alwin Schmitt
The development of business activity in the aluminium sector in Germany was mixed in the first half of 2019: aluminium producers and processors had to reduce their production in the first half of 2019 (by 5.6 and 5.4 per cent respectively) while semis producers were able to increase theirs (by 1.9 per cent).
Expectations for 2019 are subdued: “The economic slowdown in our key industries is also reflected in the call-off figures so we are expecting production in our industry to decline,” explains Marius Baader Executive Director of GDA. “However, this will be offset partly by activity in the construction industry, which is still good, and a pleasing development in the packaging sector.”
Although the economic outlook for the aluminium industry is clouded in many product areas at the moment, the industry is still on a solid path of growth in the medium to long term. Christian Wellner, Executive Member of the Managing Board adds: “Demand for aluminium will continue to grow globally and demand in Germany remains high. Furthermore, the German aluminium industry has also shown in the past that it can hold its own despite increasingly intense competition and cooling demand. This good performance is largely due to the high innovation potential of German companies and their good competitive position.”
Situation and outlook: risk situation unchanged
“We are very concerned about the trade conflict between the USA and China and are keeping a watchful eye on developments,” explains Andreas Postler, Head of Economics and Trade Policy at GDA. “This is not only because considerable quantities of aluminium products are being diverted to the European market but also because the sword of Damocles, in the shape of extensive protectionism, is reducing investment activity considerably in many sectors.”
He concludes: “There are other cyclical factors as well, such as the slowdown in global growth dynamics, an increase in the probability of an unregulated Brexit, a far-reaching structural change in the automotive industry, and these are having a negative impact on the economy. The German aluminium industry cannot detach itself from this development. That is why the mood in the industry is subdued for the time being.”