The year 2013 was marked by a strengthening in advanced economies and a slowdown of growth in emerging markets. However, emerging markets continued to account for the bulk of global growth. According to projections by the International Monetary Fund (IMF), global gross domestic product (GDP) increased by 2.9% in 2013. While advanced economies only generated an increase of 1.2%, the GDP of emerging economies and developing countries grew by 4.5%.
The GDP of the United States, the world’s largest economy, grew by 1.6% in 2013, a lower rate than expected a year ago. Growth in the United States was hampered by the fiscal consolidation and conflicts over the increasing debt ceiling. For the eurozone, the IMF noted a decline in gross domestic product by 0.4%. While the southern European countries still struggled, the core economies showed signs of recovery. Spurred by fiscal policy changes, Japan also showed signs of economic recovery.
The overall global trends and increased weight of emerging markets are supporting the development at Merck, with the Emerging Markets region contributing around three-quarters of total organic sales growth in 2013.
Pharmaceutical market
IMS Health, a provider of market information for the health care industry, reported a 2.9% increase in pharmaceutical market sales in 2013. This growth was driven by emerging economies; among others the Chinese pharmaceutical market grew by 14.5% and the Latin American market grew by 10.8%. By contrast, due to continued cost-containment measures and patent expiries, the U.S. and EU markets declined slightly. Remarkably, the global market for multiple sclerosis treatments, which includes Merck Serono’s top-selling product Rebif®, grew by 10%, which was significantly above the market average, among others spurred by recent launches of new products according to research by Evaluate Pharma.
The pharmaceutical research firm Nicholas Hall reported that the over-the-counter (OTC) drug market grew by 4.7% in the year 2013. The growth was driven by Latin America and Asia, while Europe, where the Consumer Health division generates the largest share of its sales, grew by 3.7% in 2013.
Markets for high-tech materials
With its Liquid crystals business Merck is the leading supplier of LC mixtures to the display industry, which experienced a sluggish year in 2013 after years of significant growth. The market analysis provided by Display Search came to the conclusion that only a slight increase of 1.4% in the annual area of flat panel display shipments in 2013 occurred. Notably, with more than 90% of the total market, LC remains the dominant display technology with TV display size as the major growth driver.
Cosmetics and automotive coatings represent major markets for Merck’s Pigments business. The German Automotive Industry Association (VDA) reported a positive development for global sales of passenger cars, which exceeded expectations and grew by 5% in 2013. The growth was driven by the U.S. (+7%) and China (+21%) with China becoming the world’s largest market for passenger cars, while markets in Japan and western Europe slightly declined.
Life science market
Within the life science sector, the Merck Millipore division is a leading supplier of products and services which are used in the research, development and production of biotech and pharmaceutical drugs as well as general laboratory applications.
The market researchers from Frost & Sullivan reported modest growth of 1.2% for the global laboratory products market in 2013, below last year’s expectations. Significant differences in growth between regions existed: Markets in Europe (+0.1%) and the United States (+0.3%) remain challenging due to uncertain economic conditions and due to budget sequestration measures in the academic and governmental sectors in the United States. Emerging economies and developing countries grew significantly faster, however, with approximately 11% of the global market volume remaining relatively small in size.
Dependent on the sales and R&D spending of pharmaceutical companies, the market for Process Solutions suffered from a 1.5% decline in industry R&D spending in 2013, as reported by Evaluate Pharma. At the same time, the market was positively influenced by pharmaceutical sales, which grew by 2.9% in 2013.
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