BASF Report 2021 Management’s Report – Economic Environment in 2022 147 industry is also likely to return to its long-term growth path after the for the manufacturing sector. We are assuming growth of 2.0% in Trends in chemical production 2022–2024 (excluding pharmaceuticals) gradual reopening of the hospitality sector following the lockdowns the United Kingdom (2021: 2.5%). Average annual real change in the previous year provided above-average growth in 2021. World 3.3% For the United States, we are forecasting significantly stronger European Union 2.0% Under normal weather conditions, growth in agricultural produc- growth in chemical production (2022: 4.5%; 2021: 1.8%) following tion in 2022 will presumably be similar to the long-term average. the weather-related production outages in the previous year. In United States 2.7% Production in industrialized countries will grow only weakly. By addition to statistical base effects, we expect growing demand Emerging markets of Asia 4.1% contrast, we anticipate solid production growth in emerging markets above all from the automotive industry, the energy sector and the Japan 1.7% such as Argentina, China, India and Ukraine. consumer goods industry. South America 2.1% In Japan, we expect growth in chemical production to track the Outlook for the chemical industry growth rate for GDP. The strongest growth stimulus will be provided by the electronics industry and the automotive sector (2022: 2.5%; Global chemical production (excluding pharmaceuticals) is expected 2021: 3.7%). to grow by 3.5% in 2022, slower than in the previous year (2021: 6.1%) but still above the average for the years prior to the corona- Chemical production in South America will presumably grow at virus pandemic. In the advanced economies, we anticipate growth around the same rate as the economy as a whole (2022: 1.5%; of 3.1% (2021: 3.9%), which is above the average for the pre-crisis 2021: 4.6%). This will be primarily driven by the significant recovery years. Growth in the emerging markets is expected to slow at a in automotive production and continued moderate growth in much stronger rate (2022: +3.7%; 2021: 7.2%). Based on these demand from agriculture and the raw materials sector. forecasts, global chemical production at the end of the year will be almost 10% above the 2019 level. Outlook for chemical production 2022 (excluding pharmaceuticals) Real change compared with previous year In China, the world’s largest chemical market, we are forecasting World 3.5% much weaker growth in chemical production of 4.0% as base effects European Union 2.8% from the previous year level off (2021: 7.7%). Growth in demand for chemicals in the consumer goods industries and from the electron- United States 4.5% ics industry is expected to weaken. We anticipate continued growth Emerging markets of Asia 3.9% in demand from the Chinese automotive industry. In the other Japan 2.5% emerging markets of Asia, we expect chemical growth to be slightly South America 1.5% weaker than in China. In the E.U., we expect chemical production to increase by 2.8% (2021: 6.0%). We anticipate a significant recovery in the automotive industry, which will strengthen growth in demand for chemicals. For the other customer industries, we are forecasting growth slightly above the long-term average. However, momentum in chemical production already slowed over the course of 2021. As a result, the European chemical industry will presumably grow below the average