Sector-Specific Conditions

In the sectors relevant to our business, we expect economic trends to be largely positive in 2020, though this depends on the world economy.

Chemical Industry Expected to Post Slight Growth in 2020

After a difficult year for Germany’s chemical and pharma- ceutical industry, the German Chemical Industry Association (VCI) anticipates that production will increase by a slight 0.5 percent in 2020, fueled mainly by growth in the pharmaceutical sector (+2.0 percent). According to the VCI, the industry’s total sales should climb by 0.5 percent to about €194 billion amid stagnating prices.

WACKER’s chemical divisions see major growth opportunities in the BRICS countries and other emerging economies. Rising affluence in emerging economies will continue to lift WACKER’s sales in countries such as China and India, as well as across Southeast Asia. WACKER’s portfolio has many high-value products that appeal to new customer groups, spurring demand for WACKER technologies from industrial customers. Moreover, part of our product portfolio is used in highly automated manufacturing processes. In these sectors, WACKER is also generating above-average growth in advanced economies.

Construction Industry Remains on Growth Trajectory

According to market research institute B+L Marktdaten GmbH, the construction industry will continue expanding over the next few years. On average, global construction volume is expected to rise by about 1.3 percent annually through 2022, with Asia and South America as the main growth drivers. B+L estimates that the European construction industry, too, remains on track for further growth, albeit at a lower rate. In North America, on the other hand, the construction market faces a slight contraction, according to projections.

Construction-Industry Growth Rates by Region, 2020–2022

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Renovation, energy-efficiency and sustainability projects will continue to offer WACKER good growth opportunities in the coming years. We expect WACKER POLYMERS’ construction sales to grow in 2020 in every region, especially Asia. We consider the main growth drivers to be low-emission interior paints and dry-mix mortars. At WACKER SILICONES, the percentage of value-added specialty products should grow further in a large number of segments. Prospects are good for hybrid polymers, which are used to formulate high-performance adhesives and sealants. The same applies to silane-based cement additives, which not only offer energy-savings in production and an improved shelf life, but also enhance the quality and durability of concrete.

Moderate Growth Expected in the Electrical and Electronics Sector

The German Electrical and Electronic Manufacturers’ Association (ZVEI) expects global market volumes in the sector to expand by 3 percent in 2020. According to the ZVEI, emerging markets and Asia will deliver the main impetus for growth. But the ZVEI also expects to see slight increases in Europe and the Americas.

WACKER continues to see generally good growth prospects in the automotive industry, for example through the increasing use of driver-assistance systems, sensors and optical displays, and the growing importance of electromobility. Weakening demand for cars, however, may have a negative influence.

Further Increase in Installed Photovoltaic Capacity Likely in 2020

Economic conditions for photovoltaics (PV) will remain dynamic and challenging in 2020. The highly competitive situation necessitates greater efforts to achieve further significant cuts in production costs. At the same time, lower levelized costs are making PV more competitive relative to other energy sources. Solar energy is central to achieving global climate-protection targets, since it significantly reduces specific carbon-dioxide emissions compared with fossil fuels.

The PV market is expected to deliver further growth. China will remain the world’s largest and most important market in 2020. Other markets likely to add large amounts of capacity include India, the USA, Europe and Japan. Growth potential is also strong, for example, in Central and South America, Southeast Asia, the Middle East and Africa. Based on its own market surveys and those of third parties, WACKER expects newly installed PV capacity to be between 135 and 155 gigawatts (GW) in 2020.