Economic Outlook

Global Economy

For the 2024 fiscal year, we expect global economic output to improve slightly – now by 2.7% – compared with the outlook given in the Annual Report 2023. The global economy will stay on a solid growth path, driven by robust economic data and improved growth prospects in the regions. Inflation seems to be largely under control and cuts in key interest rates by central banks in all regions are expected to build positive momentum for economic development in all regions.

For the EMLA region, we expect the economy to grow by 1.5%, and therefore more slowly than the global economy, in the year 2024. Although Latin America and the Middle East are expected to see stronger growth, Europe has experienced weak economic momentum in the year 2024 to date, and according to forecasts this will not improve by the end of the year.

For the NA region, we project growth of 2.5%, which is virtually on a level with the global growth outlook. Economic growth in the United States in the second quarter, which was stronger than expected, and an inflation rate approaching the Federal Reserve’s target are supporting the forecasts for this region. The significant cut in the United States’ key interest rate in September 2024 means that robust economic development can be expected to continue in the NA region. Although the labor market is weakening and the unemployment rate is going up, the risks of a significant deterioration in economic performance are low.

For the APAC region, we expect the economy to expand by 3.9% in 2024, and therefore faster than the global economy, driven by a strong export market and fiscal policy measures in China. Although the latest announcements of extensive economic measures in China prompt expectations of positive effects on economic growth, the region continues to be exposed to growth risks.

¹ Real growth of gross domestic product; source: Oxford Economics, “Growth 2023” and “Growth forecast 2024” as of October 2024.

² Latin America (excluding Mexico).

³ North America (Canada, Mexico, United States).

Main Customer Industries

The growth prospects for global economic output, which are slightly better than those presented in the outlook published in the Annual Report 2023, are not reflected in all of Covestro’s main customer industries.

Compared to the original outlook, we now anticipate negative growth of 0.5% for the global automotive industry. The decline is attributable to continued high inventory levels and significantly weaker demand for electric vehicles.

For the year 2024, we still project negative growth of 2.5% for the global construction industry. The persistent real estate crisis in China and the deteriorating situation in the U.S. construction industry continue to weigh on the sector.

For the electrical, electronics, and household appliances industry, we are anticipating growth of 4.2%, therefore similar to the forecast published in the Annual Report 2023. This is driven by trends such as artificial intelligence and the need of consumers to replace consumer electronics purchased during the coronavirus pandemic.

In fiscal 2024, we now anticipate growth of 0.2% for the global furniture industry. This is mainly attributable to expected weak production output in Europe and North America due to lower consumer spending on furniture.

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: October 2024.