(Dec 10): Germany’s chemical companies are grappling with another year of decline as Europe’s biggest economy is at the onset of a de-industrialisation process, industry group VCI warns.
Its preliminary 2025 figures released on Wednesday (Dec 10) show that plants operated at only 70% capacity, the lowest since 2002 and clearly under the profitability threshold of about 80%, VCI said. While the pharmaceutical industry’s production and revenue expanded this year, the chemical sector’s output fell 2.5%.
“The industry is sending out an SOS,” said VCI president Markus Steilemann in a statement. “2025 was another very difficult year for our sector and the outlook is not looking any brighter.”
For next year, the industry group anticipates an even sharper drop in prices and projects a 3.5% decline in revenue. Tariffs are adding to the pressure, driving foreign revenue down by 3.5%, a steeper fall than the already shrinking domestic earnings.
The main problem is oversupply stemming largely from China, coinciding with persistently weak demand from key buyers such as automakers. Order intakes are 20% below the pre-crisis level in January 2020, according to the industry group. Their survey shows that every second company faces a severe shortage of orders.
Added to this mismatch of high supply and low demand are high energy and labour costs. German companies lost price competitiveness, the industry group states. Some 75% of the firms in the survey are implementing cost-cutting programmes and one in five firms is shutting down or relocating.
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