VCI Predicts that the Decline in Germany¡äs Chemical Production will Narrow in 2026
2025-12-16
The VCI released an industry outlook on December 10, stating that production in Germany¡äs chemical and pharmaceutical sectors will stagnate in 2026, with chemical output expected to decline by 1%, a narrower drop compared to 2025. Due to falling product prices and production stagnation, both domestic and international revenues in the chemical and pharmaceutical industries will decrease by 2%.
The VCI pointed out that the situation in Germany¡äs chemical industry continued to deteriorate in 2025, with production and producer prices in the chemical and pharmaceutical sectors declining by 0.5%, and revenue dropping by 1%. Chemical product output fell by 2.5% year-on-year, while the overall industry revenue (including domestic and international) saw an expanded decline of 3%. Currently, the chemical industry¡äs capacity utilization rate stands at only 70%, hitting a historic low and far below the break-even line.
The VCI membership survey indicates a pessimistic industry sentiment. 20% of surveyed companies plan to relocate or completely shut down production capacity, with 10% considering the closure of entire production bases. Over 40% of companies anticipate a further decline in domestic revenue, while nearly half believe profitability will continue to deteriorate.
VCI pointed out that the core constraints are the lack of competitiveness in domestic production costs, high uncertainty in regulatory policies, and lengthy approval processes. Coupled with soaring energy and emission costs, a strong euro exchange rate, overcapacity abroad, U.S. tariff barriers, and geopolitical economic turbulence, the industry¡äs operational pressure has sharply increased.
The VCI calls on Germany and Europe to advance reforms in energy, climate, administrative systems, and social security, formulate long-term industrial policies, and improve the capital market alliance and internal market to achieve climate neutrality and establish a level playing field with the United States and China.
The VCI pointed out that the situation in Germany¡äs chemical industry continued to deteriorate in 2025, with production and producer prices in the chemical and pharmaceutical sectors declining by 0.5%, and revenue dropping by 1%. Chemical product output fell by 2.5% year-on-year, while the overall industry revenue (including domestic and international) saw an expanded decline of 3%. Currently, the chemical industry¡äs capacity utilization rate stands at only 70%, hitting a historic low and far below the break-even line.
The VCI membership survey indicates a pessimistic industry sentiment. 20% of surveyed companies plan to relocate or completely shut down production capacity, with 10% considering the closure of entire production bases. Over 40% of companies anticipate a further decline in domestic revenue, while nearly half believe profitability will continue to deteriorate.
VCI pointed out that the core constraints are the lack of competitiveness in domestic production costs, high uncertainty in regulatory policies, and lengthy approval processes. Coupled with soaring energy and emission costs, a strong euro exchange rate, overcapacity abroad, U.S. tariff barriers, and geopolitical economic turbulence, the industry¡äs operational pressure has sharply increased.
The VCI calls on Germany and Europe to advance reforms in energy, climate, administrative systems, and social security, formulate long-term industrial policies, and improve the capital market alliance and internal market to achieve climate neutrality and establish a level playing field with the United States and China.