The order slump has the chemical industry firmly in its grip. From January to August, the chemical sector recorded a decline of 2.9 percent in domestic business – a clear sign of the ongoing weakness of the domestic industrial economy. Internationally too, chemistry has recently failed to impress: incoming orders from abroad developed just as sluggishly as at home. Sales fell by 3.3 percent year on year. Export revenues remained below the previous year in all regions. And this, although industrial activity in many places performed better than in Germany. The order slump was particularly evident in North America, where new U.S. tariffs further hampered sales. However, sales were also declining in the European home market. The problem: Due to high production costs in Germany, it is becoming increasingly difficult to benefit from growth opportunities in other countries and regions.
No improvement is in sight. Business and export expectations in the chemical industry have recently even deteriorated. The hope for an economic turnaround and political reforms is increasingly fading.
At first glance, the situation in the pharmaceutical industry looks better: not only domestically, but also in most foreign markets, pharmaceutical companies have achieved revenue growth so far this year. Business expectations and the outlook for export business also remain positive. However, worries are growing. In addition to location challenges, the pharmaceutical industry is struggling with price pressure. In the important U.S. export market, not only the already increased tariffs are slowing momentum, but in the medium term additional special tariffs are looming.
VCI Director General Wolfgang Große Entrup: “German industry continues to race toward the abyss – and policymakers are ducking away. If action is not taken now, things could soon look pitch-black for the chemical industry. Excessively high energy costs, paralyzing bureaucracy, and new trade barriers are suffocating our export nation. Other nations are taking off; Germany is sitting on the substitute bench. We need far-reaching relief – in the short term through electricity price compensation and an industrial power price. Europe must finally wake up as well: the situation requires an immediate regulatory moratorium and a reform of the emissions trading system so that our companies can manage the transition to climate neutrality.”
