The downturn in Germany's chemical and pharmaceutical industry continued into the third quarter.
Production and sales declined once again, while plant utilization hit a new low. According to the industry association VCI on Tuesday, production fell by 1.5 percent compared to the same period last year. This decline was solely due to the chemical sector, where production plunged by 4.3 percent. In contrast, the pharmaceutical sector saw a 3.4 percent increase. Revenue shrank by 2.3 percent to EUR52.1 billion. Utilization of chemical plants dropped further to just 70 percent, even lower than in the previous quarter, and remained well below the threshold considered profitable.
VCI Chief Executive Wolfgang Große Entrup painted a bleak picture of the situation. "The industry is stumbling toward the end of the year," he said. "Especially in chemicals, there are problems everywhere. Production, sales, prices, utilization: everything is in the red. The knock-out is drawing ever closer." The association cited weak industrial activity, global overcapacity, and high operating costs as reasons for the crisis. Additionally, the sector is suffering from weak export business.
According to VCI, there is no short-term improvement in sight. The association therefore confirmed its forecast for 2025, still expecting stagnant production and a one percent decline in revenue to EUR221 billion. Sentiment in the industry has also deteriorated sharply in October, according to a survey by Munich's Ifo Institute on Monday, due to the thinnest order backlog in more than 30 years. The business climate barometer fell to minus 19.4 points from minus 12.0 in September.
(Reporting by Patricia Weiß, editing by Ralf Banser. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
