Archive:Fuel processing and chemicals production statistics - NACE Rev. 1.1
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- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article introduces a set of statistical articles which analyse the structure, development and characteristics of the economic activities in the fuel processing and chemicals production sectors in the European Union (EU). These sectors correspond to NACE Rev 1.1 Subsections DF and DG, and their activities are treated in more depth in four further articles:
- Fuel processing activities, corresponding to NACE Subsection DF, which covers the processing of energy producing minerals such as coal, crude oil and nuclear fuels, and the manufacture of coke oven products and refined petroleum products;
There are also three articles covering the manufacture of chemicals, including man-made fibres, which together comprise NACE Subsection DG:
- Petrochemicals and basic chemical production;
- Pesticide, paint, soap and fibre production;
- Pharmaceuticals production.
The mixture of volatile liquid hydrocarbons (such as naphtha and kerosene) that comprises crude oil is one of the key raw materials for chemicals manufacturing, along with natural gas. A number of enterprises that are involved in fuel processing, and particularly the manufacture of refined petroleum products, are also involved in the manufacture of chemicals: for this reason these two types of manufacturing have been put together in this article. Indeed, Royal Dutch/Shell and Total were amongst both the largest global fuel processors and chemical enterprises in the world.
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Main statistical findings
Structural profile
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As many as ten of the world’s twenty-five largest chemical manufacturing enterprise groups, in terms of chemical sales, were from the EU-27. This helps explain how EU-27 chemical manufacturers accounted for about 30 % of world sales in 2007.
Fuel processing and the manufacture of chemicals (NACE Subsections DF and DG) were the main activities of 34.9 thousand enterprises across the EU-27 in 2006. These enterprises had a turnover of EUR 1 098.7 billion in 2005, from which EUR 217.0 billion of value added was generated, which was the equivalent of 4.0 % of the value added generated across the non-financial business economy in 2005. These enterprises employed just over 2 million persons in 2006, the equivalent of 1.6 % of the total workforce of the EU-27’s non-financial business economy. Almost all of these workers were paid employees (98.8 %, 2005), indicating a very low incidence of self-employed persons in this sector.
The manufacture of chemicals (NACE Subsection DG) generated an estimated EUR 190.0 billion of value added in 2006, over four fifths of sectoral value added. Within chemicals manufacturing, the manufacture of pharmaceuticals subsector (NACE Group 24.4) was the largest in terms of the EUR 70.5 billion of value added generated, followed by the manufacture of basic chemicals (NACE Group 24.1) which generated a further EUR 65.0 billion of value added. The manufacture of miscellaneous chemical products (NACE Groups 24.2, 24.3, 24.5, 24.6 and 24.7) was the smallest of the three chemicals subsectors in terms of value added (EUR 51.4 billion); more details concerning the composition of this varied range of activities is provided in the article on Pesticide, paint, soap and fibre production statistics. However, this subsector was the largest in terms of its workforce; the 708.0 thousand persons employed in the manufacture of miscellaneous chemical products accounted for a little over one third of all those working across the EU-27 in the fuel processing and chemicals manufacturing sector. The three chemicals subsectors dwarfed the fuel processing subsector in terms of enterprise numbers, value added and persons employed. However, fuel processing enterprises generated more turnover (40 % of the sectoral total in 2005) than any of the three chemicals subsectors. Although fuel processing enterprises represented only 3.7 % of all enterprises within the sector in 2006, they employed 8.1 % of its workforce and generated a little more than double this proportion (17.8 %, 2005) in terms of value added.
The fuel processing and chemicals manufacturing sector in Germany was by far the largest among the Member States, generating a little over one fifth (22.7 %) of total value added across the EU-27 in 2006 and accounting for a similar share of employment. Ireland was the Member State most specialised in fuel processing and the manufacture of chemicals in value added terms, as the value added generated in this sector accounted for 12.8 % of the value added of its non-financial business economy in 2006. Other Member States in which there was also strong specialisation in these activities included Belgium, Poland (2005) and Hungary.
There was a high share of regional employment in the fuel processing and chemicals manufacturing sector in Köln (Germany), where about one in every eight (12.4 %) persons employed in the non-financial business economy were engaged in these activities. Although this was by far the strongest regional concentration of fuel processing and chemicals manufacturing workers, there were a number of other regions across Germany as well as France, as well as other hotspots including Antwerp in Belgium and Cheshire in the United Kingdom, where there was also high employment specialisation.
The production index for chemicals manufacturing across the EU-27 rose continuously and strongly (an average of 3.4 % per year) during the period between 1997 and 2007, far outpacing the growth recorded across industry (NACE Sections C to E), particularly when industrial output as a whole went through a period of stagnation between 2001 and 2003. In contrast to chemicals manufacturing, the output of fuel processing across the EU-27 was relatively unchanged during much of the period considered. There was relatively strong output growth in 2004, however, after which output levels were maintained; this growth spurt was enough to raise the average rate of output growth to 0.5 % per year for the ten years through to 2007.
In addition to output growth, there were some strong price rises during the same period. The EU-27 price index for fuel processing almost doubled between 1997 and 2007 (an average rise of 6.9 % per year), while that for chemicals manufacturing rose more moderately (an average increase of 1.9 % per year). For both activities, there were strong rises in 2000 and from 2004 onwards.
Although output and prices for both fuel processing and chemicals manufacturing increased over the period between 1997 and 2007, there was a different development in terms of employment. EU-27 employment within chemicals manufacturing enterprises and fuel processing enterprises declined continuously and relatively steadily in the period between 1997 and 2006, before levelling off in 2007. The rate of loss of employment within fuel processing (an annual average -2.7 % per year) during the ten year period was almost twice the rate recorded in chemicals manufacturing (an average -1.4 % per year), both being faster than the average rate of employment losses across industry as a whole (-1.2 % per year).
Fuel processing and the manufacture of chemicals within the EU-27 was not only concentrated in the larger Member States but it was also focused within large enterprises (those employing 250 or more persons); they accounted for a little over three quarters (77.7 %) of the total value added generated in 2005 and two thirds of employment within the sector. The shares of value added and employment accounted for by SMEs (employing less than 250 persons) within this sector were both the third lowest of the structural business statistics sectors (only higher than for the network supply of electricity, gas and steam, and for transport equipment manufacturing).
Employment characteristics
The gender breakdown of the fuel processing and chemicals manufacturing workforce was almost identical to that across the non-financial business economy of the EU-27 in 2007; as a little under two thirds (65.0 %) of the sectoral workforce were male. However, there was a much clearer distinction between the two regarding the proportion of workers in part-time employment. Only about one in every 15 (6.8 %) workers within the fuel processing and chemicals manufacturing sector worked on a part-time basis in 2007, about half the share (14.3 %) across the EU-27’s non-financial business economy. There was also a notable difference in age profile, as the proportion of young workers under the age of 30 was much smaller in the fuel processing and chemicals manufacturing sector (17.9 %) than was the case across the non-financial business economy (24.3 %).
This characteristic of a relatively low presence of young workers in the sectoral workforce was common among all of the Member States for which data are available[1], but notably so in Romania, Sweden, Denmark and the Netherlands where the share of this age group was between 12 and 17 percentage points lower than their average share across their respective non-financial business economies in 2007.
There were stark contrasts in the gender breakdown of the fuel processing and chemicals manufacturing workforce among Member States. In France, Latvia, Denmark and Cyprus, the share of women in the sectoral workforce was high relative to the breakdown across their respective non-financial business economies, and in the case of Latvia and Cyprus there were almost as many women as men employed in this sector.
Expenditure, productivity and profitability
There was tangible investment to the value of EUR 33.4 billion across the EU-27’s fuel processing and chemicals manufacturing sector in 2006. This level of investment corresponded to 3.2 % of investment within the non-financial business economy, a slightly lower proportion than the relative contribution of the sector’s value added. In this respect, the investment rate of the fuel processing and chemicals manufacturing sector was relatively low (14.4 %) in comparison to the rate across the EU-27’s non-financial business economy (18.0 %). This lower rate of sectoral investment was common to a majority of Member States (particularly Greece, Sweden, Belgium and Estonia) although there were others (including the Czech Republic, Germany, Italy Finland and, in particular, Luxembourg) where it was somewhat higher.
Average personnel costs across the fuel processing and chemicals manufacturing sector (EUR 54.1 thousand per employee) in 2005 approached double the average across the EU-27’s non-financial business economy (EUR 28.9 thousand per employee), and were higher than those of any of the other sectoral aggregates of the structural business statistics sectors. Despite the fact that average personnel costs in the fuel processing subsector were particularly high (an average EUR 63.7 thousand per employee), they only accounted for 3.0 % of operating expenditure in 2005, underlining the perception of a highly capital-intensive activity with a relatively small but well remunerated workforce. To a lesser extent, this characterisation also appears to apply to the EU-27’s chemicals manufacturing activities; average personnel costs were also high (an average EUR 53.2 thousand per employee) in 2005 but accounted for a slightly lower proportion (15.4 % in 2006) of operating expenditure than the average (16.1 %) across the non-financial business economy.
The value added generated by each member of the EU-27’s fuel processing and chemicals manufacturing workforce was EUR 105.5 thousand in 2005, more than double the non-financial business economy average, and the third highest level in the structural business statistics sectors (only less than mining and quarrying, and the network supply of electricity, gas and steam). The apparent labour productivity of the fuel processing subsector was particularly high (an average EUR 227.2 thousand per person employed).
Even when taking into account the relatively high average personnel costs, the resulting wage adjusted labour productivity of the fuel processing and chemicals manufacturing sector remained relatively high (194.9 % in 2005 compared with 146.5 % for the non-financial business economy in the same year). This characteristic was common among all the Member States for which data are available[2] but particularly in Poland (579.7 % compared with 210.7 % in 2005), the only exception being in Luxembourg where the wage adjusted labour productivity ratio of the sector was much lower than the ratio across its non-financial business economy.
The gross operating rate of the EU-27’s fuel processing and chemicals manufacturing sector was 9.7 % in 2005, moderately less than the non-financial business economy average (10.0 %). The gross operating rate of the chemicals manufacturing activity (13.1 % in 2006) was almost double that, however, of the fuel processing subsector (6.3 % in 2005), with the rate for pharmaceuticals subsector (18.7 %) particularly high.
External trade
Almost two thirds (65.1 %) of the total exports by EU-27 Member States in coke, refined petroleum products, nuclear fuel, chemicals, chemical products and man-made fibres (CPA Subsections DF and DG, hereafter referred to as processed fuels and chemicals) was to other Member States, a slightly smaller share than for industrial goods (CPA Sections C to E) as a whole. The remaining one third of exports to non-member countries (extra-EU-27 trade) generated a surplus of EUR 57.8 billion in 2007, the third highest surplus in the industrial structural business statistics sectors.
The trade surplus in 2007 was slightly less than that in 2006, although it was still more than one quarter (27.4 %) higher than the surplus five years earlier (2002). The general widening of the trade surplus over this period reflected the faster rate of export value growth than import value growth. The value of processed fuels and chemicals exports from the EU-27 rose continuously between 2002 and 2007, to a value of EUR 235.1 billion, which represented about one fifth (20.2 %) of the total value of EU-27 industrial exports. There was a continual increase in the value of imports over the same period, to reach a level of EUR 177.3 billion by 2007.
Within this broad range of products, there was a trade deficit of EUR 1.3 billion in coke, refined petroleum products and nuclear fuel. The bulk of the overall trade surplus recorded for 2007 came from the EUR 34.7 billion surplus recorded for pharmaceutical products (CPA Group 24.4) and the surplus of EUR 21.9 billion recorded for the group of miscellaneous chemical products (CPA Groups 24.2, 24.3, 24.5, 24.6 and 24.7), which covers pesticides and agro-chemicals, paints and varnishes, and soaps and detergents among many other products.
Germany was the largest exporter of processed fuels and chemicals as a whole; the value of German exports (intra- and extra-EU) was EUR 126.9 billion in 2007, a little under one fifth (18.8 %) of all trade by the EU Member States. Belgium was the next largest exporter of these products and had a slightly higher trade surplus (EUR 18.8 billion) than Germany (17.8 billion). However, Ireland had the highest trade surplus (EUR 32.9 billion) in these products. Exports of processed fuels and chemicals as a whole accounted for a little over one half (51.8 %) of all industrial exports from Ireland in 2007, by far the highest proportion among the Member States. By far the largest trade deficits in these products were recorded in Spain (EUR 12.2 billion) and Poland (EUR 9.4 billion).
A little more than one third (37.4 %) of imports of coke, refined petroleum products and nuclear fuel came from Russia in 2007. Almost one half of the imports of chemicals, chemical products and man-made fibres came from the United States (28.7 %) and Switzerland (20.1 %). The United States and Switzerland were also the main destination for EU-27 exports of both coke, refined petroleum products and nuclear fuel on the one hand and chemicals, chemical products and man-made fibres on the other.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include short-term statistics (STS), the COMEXT database for external trade, and Chemical & Engineering News.
Context
Enterprises in the fuel processing and chemicals sector operate within a highly regulated framework that extends from the supply of the raw materials, through their processing to the treatment of waste. The Registration, Evaluation and Authorisation of Chemical substances (the so-called REACH Regulation) came into force on 1 July 2007, with the main aims of improving the protection of human health and the environment from risks posed by chemicals. The first list of 15 chemicals to undergo scrutiny was published by the European Chemicals Agency in October 2008. A new European Parliament and Council Regulation on the classification, labelling and packaging of chemical substances and mixtures (CLP) was adopted in December 2008, in order to align the labelling and description of hazards around the world. The CLP Regulation entered into force on 20 January 2009, with the deadline for substance classification according to the new rules by 1 December 2010 and for mixtures by 1 June 2015.
The fuel processing and chemicals sector faces a number of key challenges; these are energy and raw materials supply, climate change and barriers to market entry in emerging countries. Against this background, the High Level Group on the Competitiveness of the European Chemicals Industry, which was first proposed by the European Commission in June 2007 (COM(2007) 418), released its final strategy report in February 2009. The strategies focus on more innovation and research (see the importance of this in the article called Pharmaceuticals production statistics - NACE Rev. 1.1), the responsible use of resources and a level playing field for sourcing energy and raw materials, and a drive to open world markets.
Further Eurostat information
Publications
Main tables
Database
Dedicated section
Other information
- Decision (2007/418) of 14 June 2007 setting up the High Level Group on the Competitiveness of the Chemicals Industry in the European Union
- Regulation 1272/2008 of 16 December 2008 on classification, labelling and packaging of substances and mixtures, amending and repealing Directives 67/548 and 1999/45, and amending Regulation 1907/2006