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 expect global economic growth of 2.7% in fiscal 2025. The global economy is progressively facing the effects of higher U.S. tariffs and weaker global trade. The rise in uncertainty is, moreover, increasingly weighing on investing activities.
For the EMLA region, we anticipate the economy to grow by 1.8%, and therefore more slowly than the global economy, in the year 2025. The forecast is unchanged when compared to the Annual Report 2024. Continuing high uncertainty in the global trading environment and the effects of U.S. tariffs continue to weigh on the volume of exports and companies’ capital expenditure in the region. Economic growth is expected to be underpinned primarily by private consumption, while capital expenditure will remain subdued because of the uncertain business outlook.
For the NA region, we project growth of 1.8%, which is below the level of the global growth outlook. Despite investments in artificial intelligence and the approved fiscal stimulus package, economic growth is under great pressure as a result of the cooling labor market and the continuing effects of tariffs. For this reason, the growth expected for the year 2025 is slower than forecast in the Annual Report 2024.
For the APAC region, we expect growth of 4.1% for the year 2025, still ahead of global economic expansion. Compared to the outlook published in the Annual Report 2024, the forecast for the region has remained virtually stable. The region benefits from robust exports, especially of high-quality industrial products and semiconductors, further boosted by the global boom in AI. Fiscal measures stabilizing growth are further underpinning economic development in the region.
| Economic growth1 | |||
|---|---|---|---|
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| World | 2.9 | 2.8 | 2.7 |
| Europe, Middle East, Latin America2, Africa (EMLA) | 1.7 | 1.8 | 1.8 |
| of which Europe | 1.4 | 1.4 | 1.4 |
| of which Germany | –0.5 | 0.4 | 0.2 |
| of which Middle East | 1.9 | 3.2 | 2.9 |
| of which Latin America2 | 2.0 | 2.3 | 2.3 |
| of which Africa | 3.4 | 3.9 | 3.7 |
| North America3 (NA) | 2.6 | 2.5 | 1.8 |
| of which United States | 2.8 | 2.6 | 1.9 |
| Asia-Pacific (APAC) | 4.1 | 3.9 | 4.1 |
| of which China | 5.0 | 4.4 | 4.8 |
1 Real growth of gross domestic product; source: Oxford Economics, “Growth 2024” and “Growth forecast 2025” as of October 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 1.9% in the global automotive industry for the year 2025. The reason for the decline compared to the outlook in the Annual Report 2024 is rising uncertainty, driven by the continuing trade conflicts. In addition, tariff-induced disruption and weakness due to subdued demand are weighing on the industry. An extension of the Chinese subsidy program as well as strong production volumes and local measures to contain price wars are, however, already having a beneficial effect on growth.
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 continuing positive performance in China. On the other hand, uncertainties in connection with the trade conflict are causing investment restraint, especially in Western and Eastern Europe, further dampening growth expectations.
For the electrical, electronics, and household appliances industry, we are anticipating growth of 2.9%, which is below the outlook published in the Annual Report 2024. Consumer spending by private households – a key component of demand in this industry – is sensitive to economic fluctuations. Current uncertainty caused by trade conflicts is consequently having a direct impact on the sales market.
For the year 2025, we now anticipate growth of 0.2% for the global furniture industry, which is below the forecast in the Annual Report 2024. This is mainly the result of persistent uncertainties in the trading environment as well as weaker production output in the APAC and NA regions, which are exposed to high tariffs as a result of the new U.S. trade policy. A gradual recovery and a return to the growth patterns of pre-crisis years are only expected in the medium term.
| Growth in main customer industries1 | |||
|---|---|---|---|
| Growth 2024 | Growth forecast 2025 (Annual Report 2024) |
Growth forecast 2025 | |
| % | % | % | |
| Automotive | –0.6 | 2.7 | 1.9 |
| Construction | –2.4 | 0.2 | 0.6 |
| Electrical, electronics and household appliances | 3.7 | 5.2 | 2.9 |
| Furniture | –0.5 | 1.5 | 0.2 |
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 2025.