VCI Predict a 2% Decline in Germany¡äs Chemical Industry Output
2025-11-4
Recently, the VCI stated that while it currently maintains its forecast of a 2% decline in Germany¡äs chemical production (excluding pharmaceuticals) by 2025, the actual drop may further widen.
According to VCI economist Christiane Kellermann, current indicators show Germany¡äs chemical production will decline by over 2% in 2025, with particularly significant drops in energy-intensive basic chemicals and specialty chemicals. Kellermann pointed out that both domestic and export markets in Germany¡äs chemical industry have performed weakly, along with sluggish sales. Even though some plants have already shut down, capacity utilization remains low. Given the persistently low capacity utilization and rising import pressure, Kellermann believes there may be further plant closures in the basic chemical sector.
Kellermann believes that Germany itself must fulfill its "duty of care" by enhancing its competitiveness as a business investment destination. Specifically, it needs to address issues such as excessively high energy, raw material, and labor costs while alleviating the heavy burden of taxation and administrative regulations. Additionally, certain policies introduced by the German government and the EU, which impose restrictions or even bans on the sale and production of specific chemicals or materials, have also put pressure on Germany¡äs chemical industry. For instance, restrictions on per- and polyfluoroalkyl substances (PFAS) have already led some companies to shut down factories and relocate production capacity.
For 2026, VCI forecasts an improvement in Germany¡äs chemical production and sales, primarily based on the government¡äs announced defense and infrastructure spending plans. However, she also cautioned that the actual impact of government measures remains uncertain, and necessary reforms are progressing at an insufficient pace. Kellermann remarked, "We take a cautious stance, and businesses are generally skeptical as well."
According to VCI economist Christiane Kellermann, current indicators show Germany¡äs chemical production will decline by over 2% in 2025, with particularly significant drops in energy-intensive basic chemicals and specialty chemicals. Kellermann pointed out that both domestic and export markets in Germany¡äs chemical industry have performed weakly, along with sluggish sales. Even though some plants have already shut down, capacity utilization remains low. Given the persistently low capacity utilization and rising import pressure, Kellermann believes there may be further plant closures in the basic chemical sector.
Kellermann believes that Germany itself must fulfill its "duty of care" by enhancing its competitiveness as a business investment destination. Specifically, it needs to address issues such as excessively high energy, raw material, and labor costs while alleviating the heavy burden of taxation and administrative regulations. Additionally, certain policies introduced by the German government and the EU, which impose restrictions or even bans on the sale and production of specific chemicals or materials, have also put pressure on Germany¡äs chemical industry. For instance, restrictions on per- and polyfluoroalkyl substances (PFAS) have already led some companies to shut down factories and relocate production capacity.
For 2026, VCI forecasts an improvement in Germany¡äs chemical production and sales, primarily based on the government¡äs announced defense and infrastructure spending plans. However, she also cautioned that the actual impact of government measures remains uncertain, and necessary reforms are progressing at an insufficient pace. Kellermann remarked, "We take a cautious stance, and businesses are generally skeptical as well."