Management Report
2. Economic Outlook
We expect that the expansion of the global economy will continue to weaken in the fourth quarter of 2010 compared to the significant growth rates recorded in the first few months of the year. Economic growth in the emerging markets will likely remain robust in the coming months, but the pace will probably be somewhat slower. Growth rates in the industrialized countries, however, are expected to decline more significantly.
In the pharmaceuticals market we continue to predict growth rates for 2010 in the mid-single digits. This expansion is likely to be driven increasingly by emerging countries. We anticipate a weaker trend in the traditional markets such as the United States and the major European countries due to patent expirations for leading products of various pharmaceutical companies, the drop in new product launches and increasing cost pressure exerted by health care institutions.
In the consumer health markets we expect positive growth in the low single digits for this year as a whole.
The market for crop protection products is expected to shrink again slightly in 2010 as a whole due to the adverse weather conditions experienced in many growing regions in the first half. By contrast, the seed market will likely continue to expand thanks to growth in the area of genetically modified seed.
Despite a slight slowing of global economic growth, we continue to anticipate a gratifying trend in the main customer industries of MaterialScience through the end of 2010. We believe the strong growth that has taken place so far this year in the automotive industry will persist in the remaining months. The expectations for the construction industry continue to vary by region. While business in western Europe, Japan and the United States is likely to remain rather sluggish in the final quarter of 2010, we expect the construction industry to develop particularly well in the rest of Asia, eastern Europe and Latin America. Sales in the electrical and electronics industry, too, will probably benefit from rising demand in the principal markets in the near future. Following a sharp decline in the crisis year 2009, the furniture industry should continue to recover at a moderate rate.