Institutions Predict a Gloomy Outlook for Germany¡äs Chemical Industry
2025-11-21
On November 11, when releasing the third-quarter 2025 data, the German Chemical Industry Association (VCI) pointed out that the current situation is painful for many companies in Germany¡äs chemical and pharmaceutical industries ¨C with declines in output, prices, and exports. "2025 will not have a happy ending. Without a change in direction, the chemical industry will face elimination."
VCI stated that as the economic situation further deteriorates, output, prices, and sales have declined again. Capacity utilization is significantly below the profitability threshold. Chemical companies continue to be affected by sluggish overall industry activity, global overcapacity, and high location costs. The weakness in chemical import and export business is particularly worrying. Sales in markets outside Europe have dropped sharply, while sales in Europe have stagnated, and the industry is benefiting less and less from growth in other countries. VCI indicated that there is no sign of improvement in this trend in the short term; on the contrary, it may become even more pessimistic.
Wolfgang Grosse Entrup, Director General of VCI, stated, "The entire chemical industry is currently going through a tough period at the end of the year. No matter which aspect you look at, various problems emerge: production, sales, prices, capacity utilization ¨C all are in a downward trend."
When talking about the future development path, Entrup is not optimistic. He said, "The chemical industry is not the only one struggling. Confidence in the pharmaceutical industry is also collapsing: unstable U.S. trade policies, tariffs, and falling global prices. If no action is taken, German industry will continue to struggle under the pressure of transformation costs and bureaucracy, and may eventually be completely crushed."
VCI predicts that chemical and pharmaceutical production in Germany will at best remain stagnant in 2025. Chemical production is likely to decline by 2%, though the pharmaceutical industry could partially offset this impact. Due to a slight drop in prices, the total sales of the industry are expected to decrease by approximately 1% to 221 billion euros.
Data shows that chemical companies will cut production again, with output in the third quarter of 2025 falling by 0.3% compared to the previous three months and by 1.5% from a year ago. The capacity utilization rate of the chemical industry stands at only 70%. Sales in the third quarter reached 51.1 billion euros, down 1.5% from the previous quarter.
VCI stated that as the economic situation further deteriorates, output, prices, and sales have declined again. Capacity utilization is significantly below the profitability threshold. Chemical companies continue to be affected by sluggish overall industry activity, global overcapacity, and high location costs. The weakness in chemical import and export business is particularly worrying. Sales in markets outside Europe have dropped sharply, while sales in Europe have stagnated, and the industry is benefiting less and less from growth in other countries. VCI indicated that there is no sign of improvement in this trend in the short term; on the contrary, it may become even more pessimistic.
Wolfgang Grosse Entrup, Director General of VCI, stated, "The entire chemical industry is currently going through a tough period at the end of the year. No matter which aspect you look at, various problems emerge: production, sales, prices, capacity utilization ¨C all are in a downward trend."
When talking about the future development path, Entrup is not optimistic. He said, "The chemical industry is not the only one struggling. Confidence in the pharmaceutical industry is also collapsing: unstable U.S. trade policies, tariffs, and falling global prices. If no action is taken, German industry will continue to struggle under the pressure of transformation costs and bureaucracy, and may eventually be completely crushed."
VCI predicts that chemical and pharmaceutical production in Germany will at best remain stagnant in 2025. Chemical production is likely to decline by 2%, though the pharmaceutical industry could partially offset this impact. Due to a slight drop in prices, the total sales of the industry are expected to decrease by approximately 1% to 221 billion euros.
Data shows that chemical companies will cut production again, with output in the third quarter of 2025 falling by 0.3% compared to the previous three months and by 1.5% from a year ago. The capacity utilization rate of the chemical industry stands at only 70%. Sales in the third quarter reached 51.1 billion euros, down 1.5% from the previous quarter.