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We expect a further slowing of global economic growth toward the end of the year. There are increasing signs that the economy is weakening, particularly in Europe and the United States. We foresee robust, though somewhat slower, rates of growth in the emerging markets.
We continue to expect that the pharmaceutical market will grow by a mid-single-digit percentage in 2011, mainly driven by the emerging economies. We anticipate weaker growth in the United States and the major European countries.
We continue to foresee solid growth in 2011 for the consumer care market. The diabetes care market will probably grow somewhat more than initially expected due to the more favorable development of the U.S. market. We expect the positive trend in the animal health market to continue.
We expect the positive development of the global seed and crop protection market to continue for the remainder of 2011. Prices for agricultural raw materials, which remain at a comparatively high level, have accelerated market growth, especially in Latin America and Eastern Europe.
We expect to see generally lower growth rates in the major customer industries of MaterialScience in the coming months than in the year to date due to the weaker trend in the global economy.
We expect the global economy to continue growing in the second half of the year, albeit at a slower pace and with regional differences. There are increasing signs of a slowdown in growth in China; however, we expect the expansion in that country to weaken only slightly. The U.S. economy will most likely continue to gradually recover. There is a varying trend in the eurozone. While some countries are suffering from the debt crisis, we expect a continued upswing in Germany. The disasters in Japan probably will not have a significant impact on the global economy.
Overall, the growth perspectives for the global economy will depend on how Europe and the United States overcome their debt crises. Economic expansion could also be hampered by rising oil prices.
We anticipate that the pharmaceutical market will grow by a mid-single-digit percentage in 2011, with this trend increasingly driven by the emerging markets. We believe that growth will be weaker in the established markets such as the United States and the major European countries.
We continue to foresee solid growth in 2011 for the consumer care market. The diabetes care market will most likely grow only minimally this year. We expect the positive trend in the animal health market to continue unabated.
We expect a continued positive trend in the global seed and crop protection market over the course of the year. Likely contributing to this will be the high prices for agricultural raw materials that have led to an increase in agricultural production.
The recovery in the major customer industries of MaterialScience is expected to continue in the coming quarters. However, we believe growth rates will be weaker overall than in the year to date due to the declining pace of growth, especially in China, and to increasing economic risks.
The prospects for a lasting recovery of the world economy have improved in recent months. However, the rate of expansion varies greatly from one region to another. The strong pace of economic growth is expected to continue particularly in the emerging markets. There is evidence of a gradual rebound in the United States economy. By contrast, we anticipate only moderate growth in the eurozone – with the exception of Germany, where the economy is expected to expand briskly again this year. The disasters in Japan and the political unrest in North Africa and the Middle East have done little to hold back the world economy so far. However, the consequences of these events could still develop into a heightened risk for global economic growth over the course of the year. Furthermore, increases in raw material prices could dampen the positive overall economic trend.
In the pharmaceuticals market we continue to predict mid-single-digit growth rates for 2011. This expansion is likely to be driven increasingly by emerging economies. We believe that growth will be weaker in the established markets such as the United States and the major European countries.
We foresee solid growth once again in 2011 for the consumer care market. The diabetes care market will most likely grow only minimally this year. By contrast, we again expect faster-than-average growth in the animal health market.
Assuming normal weather conditions and continued high prices for agricultural commodities, we anticipate a clearly positive trend in the global seed and crop protection market over the course of the year.
The economic conditions for 2011 are favorable in all the main customer industries of MaterialScience. However, the risks stemming from the disasters in Japan cannot yet be predicted, particularly in the automotive and electrical/electronics sectors.
Global economy
We expect the global economic recovery to continue in 2011. However, the pace of expansion is likely to be slower than in 2010. Many countries will retain expansionary monetary policies that will buoy their economies, while most countries’ fiscal policies are not expected to provide any further growth stimulus. Renewed tension on the financial markets and sharp rises in the prices of oil and raw materials could pose a risk to economic development in 2011. At the end of 2010, however, these downside risks appeared comparatively slight.
The emerging markets are again expected to greatly stimulate the economic recovery in 2011. We anticipate that growth rates in the emerging markets will decline in the coming months but generally remain at a high level. The major emerging economies, especially China, appear set to continue driving global economic growth in 2011. We expect that the economic recovery in the industrialized countries will continue at a slow pace overall, though with considerable differences from one country to another. The prospects for the U.S. economy brightened considerably around the turn of the year 2010/2011, although the anticipated economic expansion is unlikely to significantly improve the situation on the employment market for the time being. Growth perspectives for Japan are more moderate. The eurozone economy in 2011 is likely to remain weighed down by the debt crisis in some countries. We therefore foresee only moderate growth overall. In the more dynamically performing E.U. countries – especially Germany – the economy should strengthen due to a recovery in domestic demand. In other eurozone countries, however, the consolidation measures triggered by public debt crises will continue to markedly dampen domestic demand.
HealthCare
We expect the growth rate for the pharmaceutical market in 2011 to be in the mid-single digits. This expansion is likely to be driven increasingly by countries such as China, Brazil, Mexico, South Korea, India and Russia. However, we foresee only low-single-digit growth rates in the traditional markets such as the United States and the major European countries due to patent expirations for major products of various pharmaceutical companies, a decline in new product launches and the increasing cost pressure being exerted by health organizations.
In 2011 we expect the consumer care market to grow more rapidly than in 2010 as a result of greater market penetration in eastern Europe and North America. The diabetes care market will probably see only very slight growth in 2011 due to continuing pressure on prices in the United States. We expect the animal health market, on the other hand, to again grow at an above-average rate in 2011.
CropScience
We foresee a positive trend for the global seed and crop protection market in 2011. Assuming normal weather patterns, we anticipate robust market growth for agrochemicals as well as for seed and traits. This growth is likely to come mainly from higher volumes.
Despite the fluctuations in global agricultural markets, the substantially higher prices for agricultural raw materials mean we are now operating in an increasingly conducive market environment. Given the limited availability of arable land, this is mainly due to steadily rising demand for food and feed products and plant-based energy raw materials.
The positive overall conditions are likely to stimulate demand for high-quality seed and thus for crop protection products, and spur farmers toward more intensive production.
In regional terms, we expect the largest growth stimulus to come from Latin America, where soybean cultivation in particular should further increase compared with 2010. Crop production is also expected to increase in the Asia/Pacific region. This applies particularly to rice, cereals and cotton, and also to specialty crops such as fruit and vegetables. By contrast, we again see only limited potential for market growth in the industrialized regions of the northern hemisphere in 2011.
MaterialScience
For 2011 MaterialScience expects a further strengthening of its main customer industries worldwide. We will focus particularly on the rapidly expanding markets of Asia, such as China and India. At the same time, we are counting on an ongoing recovery in demand in North America and Europe.
The automotive industry will remain on a path of recovery. New car sales in 2011 are likely to exceed 60 million – an all-time high. In nearly all markets except western Europe, demand and production are expected to increase considerably faster than experts predicted just a few months ago. China will remain the most important production base worldwide, with automakers planning to step up capacities again in 2012 to 17 million vehicles – more than are made in the entire European Union.
We anticipate robust expansion in the global electrical/electronics industry, where China and India will remain the principal growth drivers in 2011. The industrialized countries will also continue to benefit from the global economic recovery, however, carrying some of the many orders remaining from 2010 into 2011.
We predict a distinct recovery in the construction industry in 2011. Continuing strong growth in the emerging markets, coupled with a return to positive growth rates in mature markets such as Europe and North America, will likely lead to a gratifying global trend overall.
We believe that the market for the furniture industry will continue to brighten as it already did in 2010. The major growth regions in Asia will probably show a positive trend once again, benefiting not only from rising domestic demand, but also from an increasing recovery in global consumption. In the emerging markets of eastern Europe, the Middle East and Latin America, too, an upward trend in incomes should open up added sales potential for the furniture industry.
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