Sector-Specific Conditions

In 2024, economic trends in the industries relevant to our business will remain dominated by the impact of geopolitical turbulence. Sustained high energy prices and weak demand are likely to translate into lower industrial output overall. Stubbornly high inflation, higher interest rates and political uncertainty will continue to curb consumption and investment alike.

Moderate Growth for the Chemical Industry

After growth in the global chemical industry slowed in 2022 and 2023, the German Chemical Industry Association (VCI) expects global chemical production (excluding pharmaceuticals) to increase slightly by 2.3 percent in 2024. Looking at the chemical-pharmaceutical industry in Germany, the VCI is forecasting stagnating production and a 3.0-percent drop in sales. Internationally speaking, the competitive position of companies continues to be made difficult by high energy and raw-material costs.

Given the ongoing uncertainties, risks for WACKER’s chemical divisions remain. But the strength of our broad product portfolio has already proved itself in the crises of recent years. In 2024, despite the current dip in demand in some areas, such as the construction industry, we expect WACKER to show stable development in many markets thanks to its specialty chemical products, or to achieve growth in some areas.

What is more, the long-term growth trends for our business have not changed and will accelerate in some cases. We see medium-term growth opportunities in all regions due to innovations arising from today’s megatrends, like the ongoing digital transformation. Rising affluence in emerging economies is likely to bolster our sales in countries such as China and India, and across Southeast Asia. Mounting demand for sustainable products, too, opens up further growth opportunities for WACKER. WACKER’s portfolio has many high-value products that appeal to new customer groups, spurring stronger demand from our industrial customers. Moreover, part of our product portfolio is used in highly automated, industrial manufacturing processes. In these areas, WACKER is generating significant growth, including in advanced economies.

Global Construction Industry Trends Paint a Mixed Picture

According to forecasts by the market research institute B+L Marktdaten GmbH, total construction volume will increase by an average of around 1.0 percent in 2024. However, a decline of more than 5 percent is expected for the residential-building markets in Western and Eastern Europe in 2024. According to the estimates, North America will see a decline of as much as 7 percent. Slight growth is forecast only for the markets in the Middle East and Africa. In a large number of markets, energy-efficient building renovation will gain further momentum and become the dominant market for construction material.

Automotive Industry Expects Stable Development

The Association of the German Automotive Industry (VDA) predicts a challenging global environment for the automotive industry in 2024. Geopolitical and macroeconomic uncertainties, coupled with persistently high energy and consumer prices, are likely to put a damper on demand, although the automotive industry should remain largely stable in its various core markets. The Center of Automotive Management (CAM) – an independent scientific institute in Germany – continues to view China as the most important international market for electromobility; moreover, the country is raising its profile as an exporter. As far as Germany is concerned, both organizations expect that the phasing out of the country’s environmental bonus in December 2023 will have a negative impact on new registrations in the electromobility segment. CAM’s reasoning was that this segment lacked models in the lower price segments in particular.

Further Increase in Installed Photovoltaic Capacity Likely in 2024

Economic conditions for photovoltaics (PV) will remain dynamic and challenging in 2024. On the one hand, intense competition is creating market uncertainty. On the other, levelized costs for solar power continue to drop, making PV more competitive relative to other energy sources. Solar energy is also an important component in achieving global climate-protection targets, since it significantly reduces specific carbon dioxide emissions compared with fossil fuels. Both the cost effectiveness of PV and the political goal of keeping global warming below 1.5 °C are opening up new markets. The PV market is expected to continue growing. China will remain the world’s largest and most important market in 2024. Other markets adding large amounts of capacity are the USA, Europe, Japan and India. Highly promising growth regions include 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 450 and 530 gigawatts (GW) in 2024.