The economic growth outlook is subject to considerable uncertainties. We anticipate that economic performance will be marginally weaker than forecast in the Annual Report 2024 and now expect global economic growth of 2.6% in fiscal 2025. The global economy is facing increased risks. Rising political uncertainty as a result of persistent flashpoints as well as renewed trade tensions caused by the tariff policy of the US government are weighing 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. Compared to the Annual Report 2024, the forecast has remained largely stable. The continuing conflict between Russia and Ukraine as well as additional uncertainty about trade and economic policy – especially with regard to the United States – are making business decisions more difficult and dampening economic growth in the region.
For the NA region, we project growth of 1.9%, which is below the level of the global growth outlook. The US government’s trade policies are creating uncertainty in the region, and this has led to a reduction in growth expectations compared to the forecast in the Annual Report 2024. The impacts of the tariff measures on economic growth could be significantly more severe for Canada and Mexico, since both countries are heavily dependent on trade with the United States. This increases the risk of recession in both economies.
For the APAC region, we continue to expect growth of 3.9% for the year 2025, in excess of global economic expansion. The forecast has not changed compared to the outlook published in the Annual Report 2024. It is anticipated that growth will continue to be supported by additional fiscal policy measures and the expectation that the Chinese government will extensively ease monetary policy. At the same time, this region is exposed to considerable market uncertainty and risks as a result of the tensions in global trade policy.
| Economic growth1 | |||
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| World | 2.8 | 2.8 | 2.6 |
| Europe, Middle East, Latin America2, Africa (EMLA) | 1.6 | 1.8 | 1.7 |
| of which Europe | 1.3 | 1.4 | 1.3 |
| of which Germany | –0.2 | 0.4 | 0.0 |
| of which Middle East | 1.3 | 3.2 | 3.2 |
| of which Latin America2 | 2.0 | 2.3 | 1.9 |
| of which Africa | 3.3 | 3.9 | 3.9 |
| North America3 (NA) | 2.6 | 2.5 | 1.9 |
| of which United States | 2.8 | 2.6 | 2.0 |
| Asia-Pacific (APAC) | 4.0 | 3.9 | 3.9 |
| of which China | 5.0 | 4.4 | 4.6 |
1 Real growth of gross domestic product; source: Oxford Economics, “Growth 2024” and “Growth forecast 2025” as of March/April 2025.
2 Latin America (excluding Mexico).
3 North America (Canada, Mexico, United States).
Main Customer Industries
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 2.4% in the global automotive industry for the year 2025. The reason for the decline compared to the outlook in the Annual Report 2024 is an expectation of growing caution on the demand side, triggered by US trade policy, which is expected to weigh particularly heavily on the EMLA and NA regions and may point to further risks for the industry in the future.
For the global construction industry, we are currently anticipating growth of 0.5% for the year 2025 – which therefore exceeds the forecast in the Annual Report 2024. Although a slight recovery in the industry is discernible, higher long-term interest rates and heightened uncertainty due to protectionist trade policies are likely to dampen companies’ capital expenditure in the industry.
For the electrical, electronics, and household appliances industry, we are anticipating growth of 2.4%, which is below the outlook published in the Annual Report 2024. Higher tariffs as a result of US trade policies are expected to bring uncertainty and higher unemployment, which will weigh on consumer spending and therefore on demand for electronics and household appliances.
For the year 2025, we now anticipate growth of 1.0% for the global furniture industry. The weaker outlook compared to the Annual Report 2024 is also attributable to US trade policy. Since the furniture industry is heavily dependent on exports to the United States and demand is particularly sensitive to changes in real incomes, the planned trade policy measures will have a particularly negative impact on the industry.
| Growth in main customer industries1 | |||
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| Automotive | –0.7 | 2.7 | 2.4 |
| Construction | –2.5 | 0.2 | 0.5 |
| Electrical, electronics and household appliances | 4.1 | 5.2 | 2.4 |
| Furniture | –0.5 | 1.5 | 1.0 |
1 Covestro’s estimate, based on the following sources: GlobalData Plc, B+L, CSIL (Centre for Industrial Studies), Oxford Economics. We limited 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: March/April 2025