Germany

All areas of German society have been reshaped by the federal election. The Angela Merkel era is coming to an end after 16 years and there is great concern within the German plastics industry about what changes might be in store.

The election took place on September 26 and the final result is likely to be announced in October, with the composition of the coalition set to be revealed in the next few weeks. At present, the SPD is just ahead of the CDU, while the big election winners are the Greens who have achieved their best-ever result. Fears that left- and right-wing parties would receive more votes have been banished, with exploratory talks taking place between the SPD, the Greens and the Liberals. In all probability, another grand coalition will no longer be possible.

The identity of the ministers of the environment and of the economy will have an enormous impact on the plastics industry.

According to the latest survey from the Ifo Institute for Economic Research, the shortage of materials within the plastics industry should have peaked in August this year. More than four out of every five companies (81%) complained of dramatic procurement difficulties, resulting in drastic price increases. Furthermore, the regranulate markets are very inconsistent: whereas rPP and rPET can attract further surcharges because supply is very scarce, rLDPE, rHDPE and rPS are tending to be quiet because there are no problems with materials procurement.

How can companies deal with this bottleneck? The research institute lists the following measures: adjustment of production; servicing demand via finished goods inventory; and price increases for own products.

The outlook for the economy remains subdued because nobody knows how long companies can hold out. Only a few industries, such as the food sector, are encountering no real problems.