Production in the German chemicals and pharmaceuticals sector is predicted to rise by just 0.5% next year following a mixed 2024, the VCI chemical industry association predicted on Friday.
A lack of orders meant that production facilities were not working to capacity, it said.
A VCI survey of its members showed mixed business sentiment, with more than a quarter of companies expecting a rise in yields, with 26% seeing a flat line and 46% a decline.
Germany’s comparatively high energy costs are hitting the sector hard. Many industrial companies are cutting production, and this is having a knock-on effect on demand in the chemicals sector.
The VCI is predicting a decline in turnover of 2% to €221 billion ($231 billion) this year, with domestic demand particularly low. While production in the sector rose by 2%, this was significantly below pre-crisis levels.
“The sole ray of hope is that the rapid decline of the last two years has not continued,” VCI head Markus Steilemann said.
Looking ahead to elections on February 23, he called for a radical change in economic policy.
