The economic growth outlook is subject to continuing uncertainties. We anticipate that economic performance will be weaker than forecast in the Annual Report 2024 and now expect global economic growth of 2.5% in fiscal 2025. The global economy is increasingly faced with new flashpoints and rising uncertainty about tariff policies. Despite the agreement on tariffs between the United States and China, the general future of tariff policies continues to weigh on global economic growth.
For the EMLA region, we anticipate economic growth of 1.7% for the year 2025, which is slower than that of the global economy as a whole. The forecast is also lower when compared to the Annual Report 2024. The increase in US tariffs is leading to a decline in the EMLA region’s volume of trade with the United States. This is exacerbated by continuing uncertainty relating to future trade policy, and this is having a negative impact on companies’ capital expenditure as well as on growth in the region.
For the NA region, we project growth of 1.4%, which is below the level of the global growth outlook. The unclear political direction and the level of tariffs that will ultimately apply are causing great uncertainty in the region; this is expected to have a continuing adverse effect on consumption as well as imports. This has led to a reduction in growth expectations for the year 2025 compared to the forecast in the Annual Report 2024.
For the APAC region, we continue to expect growth of 3.9% for the year 2025, in excess of global economic expansion. Compared to the outlook published in the Annual Report 2024, the forecast for the region has remained stable. Although the trade agreement between China and the United States reached in June is having a beneficial influence on growth, the general uncertainty about trade policies continues to hold back investor confidence in the region.
| Economic growth1 | |||
|---|---|---|---|
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| World | 2.8 | 2.8 | 2.5 |
| Europe, Middle East, Latin America2, Africa (EMLA) | 1.7 | 1.8 | 1.7 |
| of which Europe | 1.4 | 1.4 | 1.2 |
| of which Germany | –0.2 | 0.4 | 0.2 |
| of which Middle East | 1.8 | 3.2 | 2.8 |
| of which Latin America2 | 2.0 | 2.3 | 2.2 |
| of which Africa | 3.4 | 3.9 | 3.6 |
| North America3 (NA) | 2.6 | 2.5 | 1.4 |
| of which United States | 2.8 | 2.6 | 1.6 |
| Asia-Pacific (APAC) | 4.1 | 3.9 | 3.9 |
| of which China | 5.0 | 4.4 | 4.7 |
1 Real growth of gross domestic product; source: Oxford Economics, “Growth 2024” and “Growth forecast 2025” as of July 2025.
2 Latin America (excluding Mexico).
3 North America (Canada, Mexico, United States).
The growth forecasts for global economic output, which are slightly weaker than those provided in the Annual Report 2024, are reflected in almost all of Covestro’s relevant main customer industries.
We now anticipate growth of 0.6% in the global automotive industry for the year 2025. The reason for the decline compared to the outlook in the Annual Report 2024 is US trade policy. Tariff-induced disruption in the supply chain for automotive parts and weakness in Europe and North America due to subdued demand are weighing on the industry.
For the global construction industry, we are currently anticipating growth of 0.6% for the year 2025 – which therefore exceeds the forecast in the Annual Report 2024. One reason is the slowly stabilizing residential construction industry in China. A return to more dynamic growth rates in the industry is expected for the region. However, continuing conflicts and political uncertainty are still dampening potential growth.
For the electrical, electronics, and household appliances industry, we are anticipating growth of 3.7%, which is below the outlook published in the Annual Report 2024. High uncertainty persists about US trade policy and potential product-specific tariffs and continues to weigh on capital expenditure and electronics production, which depends on capital.
For the year 2025, we now anticipate growth of 0.5% for the global furniture industry, which is below the forecast in the Annual Report 2024. This is mainly the result of weaker production output in the APAC and NA regions, which will be exposed to further heightened risk in future.
| Growth in main customer industries1 | |||
|---|---|---|---|
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| Automotive | –0.6 | 2.7 | 0.6 |
| Construction | –2.4 | 0.2 | 0.6 |
| Electrical, electronics and household appliances | 3.8 | 5.2 | 3.7 |
| Furniture | –0.5 | 1.5 | 0.5 |
1 Covestro’s estimate, based on the following sources: GlobalData Plc, B+L, CSIL (Centre for Industrial Studies), Oxford Economics. We limit the economic data of our “automotive and transportation” and “furniture and wood processing” main customer industries to the automotive and furniture segments (excluding the transportation or wood processing segments). As of: July 2025.