(Rewrites, adding share price, analyst, CFO comments)
By John Revill
ZURICH, April 30 (Reuters) - Clariant said the worst of the economic slowdown seemed to be passing, with signs China is recovering after a trade war with the United States and weaker factory output hit business in the first quarter.
The Swiss speciality chemicals maker's sales in China fell 18 percent during the quarter as automakers and plastics companies cut back on their deliveries.
Overall sales were flat at 1.72 billion Swiss francs ($1.69 billion), matching forecasts in a company-compiled consensus. In local currencies, sales increased by 2 percent.
Earnings before interest, tax, depreciation and amortisation after exceptional items fell 8 percent to 236 million francs, missing expectations of 253 million francs.
Its shares fell 2.7 percent by 0730 GMT. ZKB analyst Philipp Gamper said he would reduce his estimates after the weak quarterly numbers.
Chief Financial Officer Patrick Jany said he expected the situation to improve this year as Beijing's initiatives to revise the economy take effect.
"Businesses which are more linked to GDP like plastics and coatings have suffered from the environment which has been deteriorating since the third quarter," Jany told Reuters.
"The weakness has been concentrated on China, which was very weak in January and February and did not restart after Chinese New Year," he said in an interview.
"China has launched quite a few economic measures to bolster growth, so we expect Q2 to be significantly increased. It is turning, how fast and how long is a question, but you have probably seen the worst in Q4 of last year and Q1."
The executive said he expected a global recovery in the plastics industry, which uses Clariant's chemicals to colour and strengthen products.
But the difficulties of the automotive industry will likely remain, he said, as manufacturers switch to electric cars and sales decline.
Sales fell 4 percent at its plastics and coatings business, where earnings before interest, tax, depreciation and amortisation and after exceptionals fell 17 percent.
Much of the business is due to be sold off by the end of 2020 as Clariant focuses more on chemicals used to make personal care products and the natural resources business making chemicals used by the oil and mining industries.
Jany said the separation of the businesses, which includes pigments and chemical masterbatches, was well under way, with Clariant receiving "nice demand" from potential buyers including industrial and private equity players.
$1 = 1.0189 Swiss francs Reporting by John Revill; Editing by Michael Shields