BASF Report 2021 Management’s Report – Economic Environment 54 In the E.U., industrial production also increased significantly by 6.6% The construction industry expanded by around 4% (2020: –1.1%) Also above average, agricultural production grew by 3.2%, as the (2020: –7.1%). After the sharp decline in the previous year, the despite a sharp rise in prices for scarce building materials. Growth overall negative impact of extreme weather events on yields was United Kingdom saw growth of 8.3% (2020: –10.4%). By contrast, was strongest in residential construction at almost 6%. Here, the minor relative to recent years and global demand for agricultural North America’s industrial growth was below average at 5.0% rising demand for housing during the pandemic played a key role; goods increased dynamically due to economic recovery. Growth (2020: –4.8%). South America recorded an increase just above the furthermore, government transfers and persistently low interest was driven primarily by Asia (+5.3%). By contrast, production growth global average (2021: 7.0%; 2020: –6.5%). rates strengthened the purchasing power of private households. was only weak in South America (+1.2%) and even declined slightly Growth in residential construction was particularly high in the United in North America and Europe. Growth in key customer industries States. Residential construction in Europe grew only slightly above Real change compared with previous year the overall market average. In China, on the other hand, residential 2021 2020 construction cooled significantly in the wake of the government’s Trends in the chemical industry Industry total 6.5% –3.0% efforts to limit real estate prices and debt. Commercial construction Transportation 2.5% –16.6% investments remained weak with growth of less than 3%. Growth in Global growth in the chemical industry was 6.1% in 2021, almost as Of which: automotive industry 2.5% –15.9% the less volatile infrastructure segment was also below average at high as growth for the industry as a whole, despite only a minimal around 3%. decline in chemical production in the previous year unlike in many Energy and resources 3.3% –3.5% other industries. While the stronger performance in the previous year Construction 3.9% –1.1% After a decline of 2.7% in the previous year, consumer goods pro- had mainly been due to extraordinary pandemic-related demand for Consumer goods 9.0% –2.7% duction grew by a total of 9.0%. High growth rates between around disinfectants, cleaning agents and single-use plastics, as well as to Electronics 12.0% 3.2% 9% and 13% were recorded in the furniture and textile industries as the early recovery in China, in 2021, the global upswing in many Health and nutrition 6.4% 0.2% well as in the production of electrical appliances. Expansion in the consumer goods industries contributed to growth. care products sector was, by contrast, more modest at 4.3%. This Agriculture 3.2% 2.0% industry had not contracted in the previous year and was therefore Chemical production in China, the world’s largest chemical market, less able to benefit from base effects. saw especially strong expansion (+7.7%). However, growth slowed Global automotive production was particularly affected by supply at a high level during the course of the year. Electricity cuts had a problems with semiconductors. Although base effects ensured The electronics sector saw above-average growth of 12%. It negative effect on production, particularly in the third and fourth strong growth at the beginning of the year, the shortage in semicon- bene fited from the general trend toward digitalization and con nec- quarters. Growth in other emerging markets of Asia was also high at ductors worsened so significantly in the second half of the year that tivity, as well as from demand for consumer electronics and elec- around 6.9%. many automotive manufacturers had to respond by cutting produc- tronic control of household appliances and motor vehicles. Growth tion or even temporarily shutting down entire plants. As a result, was slowed by capacity bottlenecks in the production of computer Chemical production growth in the European Union was also automotive production grew only slightly overall by 2.5% in 2021 chips. extraor dinarily high at 6.0%. A contributing factor was the low basis after contracting by 15.9% in the previous year. Production levels in the previous year (2020: –2.1%). In addition, the European chemi- remained exceptionally low, with a total of around 76 million vehicles Global demand for energy and industrial raw materials rose sharply cal industry benefited from the fact that availability of global produc- produced worldwide. Similarly low production volumes had last in 2021. Production in the energy and raw materials sector, how- tion capacities for basic chemicals was intermittently limited. The been recorded in the early 2010s. Moderate growth was achieved in ever, only increased by 3.3% (2020: –3.5%), which resulted in sig- Middle East (+6.2%) also recorded solid production growth. Asia (+5.1%). The North American market stagnated (+0.1%). In the nifi cant price increases. The health and nutrition sector achieved E.U., by contrast, production decreased by 6.2% in 2021, following growth of 6.4%, which was above average for recent years due to By contrast, significant petrochemical capacities were temporarily a decline of nearly 25% in 2020. Of all the regions, South America 15% growth in the pharmaceuticals industry resulting from vaccine unavailable in the United States, in particular. After the cold spell in achieved the highest growth rate; however, it saw the strongest production. Production in the food industry grew by 3.7%, which, by the first quarter, production on the U.S. Gulf Coast was negatively decrease in the previous year (2021: +16.1%; 2020: –31.1%). contrast, was just slightly better than the long-term average. impacted by hurricanes Ida and Nicholas as well. In total, production