Chemicals still in trouble

Trend reversal not in sight

A rapid improvement in the economic situation in the German chemical industry is not in sight. The German government's relief measures have not yet reached the factory gates and are not compensating for the structural disadvantages of the location.

VCI Managing Director Wolfgang Große Entrup comments: "The annual balance sheet for the chemical industry is subterranean - production, sales and prices are in the red. Pharma is a ray of hope with a solid plus. After the change of government, we had hoped for much more. Companies are very frustrated about the economic policy correction with the handbrake on. 2026 will not be any easier. Even before the Iran war, there was no mood of optimism. The longer the war lasts, the more severe the consequences will be. The high prices and ongoing uncertainty are pushing many companies to their limits. Strategic planning is becoming less and less possible. Instead, companies are operating on sight. The world order is being reassessed. Europe is struggling to find its bearings. Germany is reforming at a snail's pace. Without a real will to reform and a powerful pace in Berlin and Brussels, there is a threat of a structural break for the industrial base."

The figures at a glance:

• Forecast: The Iran war is causing great uncertainty. For this reason, it is currently not possible to reliably forecast the development of the chemical and pharmaceutical industry in 2026.
• Production increased by 0.9% in the last quarter of 2025 thanks to strong growth in the pharmaceutical industry. This was 1.9% above the previous year's level. In contrast, production in the chemical industry was once again significantly reduced (-2.9% compared to the previous year). It therefore remains at a very low level. Capacity utilization at chemical plants averaged 72.5% in 2025. Over the year as a whole, production in the sector fell by 0.5% (chemicals -3.3%, pharma +4.5%).
• Costs and prices: There was little movement in the industry's producer prices in the fourth quarter of 2025. In a twelve-month comparison, they were 0.6% lower. Prices for chemicals continued to fall - mainly due to increasing import pressure. At the same time, the cost burden remained high compared to competitors.
• Total turnover in the industry fell by 0.6% in the fourth quarter of 2025 compared to the previous quarter. At 51.8 billion euros, it was 2.8% below the level of twelve months ago. In Germany, seasonally adjusted sales fell to 18.9 billion euros (-2.3%). Foreign business recovered slightly compared to the previous quarter to 32.9 billion euros. However, this was still 2.7% below the previous year's figure - an indication of the weak competitive price position. For the year as a whole, chemicals and pharmaceuticals together achieved sales of EUR 220 billion - a drop of 1.4% (chemicals -3.8%, pharmaceuticals +5.5%). Total domestic sales amounted to 83 billion euros and 136 billion euros abroad.