Lack of orders in the chemical industry © Destatis, VCI

In the chemical industry, production fell by 2.5%, while sales in Germany and abroad were down 3%. Particularly striking: production facilities are only operating at 70% capacity - a historic low and a far cry from profitability. Every second company reports too few orders, which have fallen by more than 20% in Germany and abroad since 2021.

Forecast 2026 for the core indicators of the chemical and pharmaceutical industry © VCI

For the coming year, the VCI expects production to stagnate overall, with a decline of as much as 1% for the chemical industry. With falling prices and stagnating output, a drop in turnover of around 2% is forecast - both in Germany and in exports.

Every 10th company wants to close entire locations

A representative VCI survey of member companies confirms the poor mood:

• 20 percent of those surveyed plan to relocate their production or shut it down completely.
• One in ten companies intends to close entire sites.
• More than 40 percent expect domestic sales to fall again.
• Almost every second company anticipates a further deterioration in earnings.

VCI member survey: Measures to strengthen/maintain profitability that have been implemented or are planned. © VCI

The main reasons for the pessimistic expectations are the framework conditions in Germany: uncompetitive production costs, high regulatory uncertainty and slow approval procedures. Added to this are bureaucracy, high energy prices and rising emissions and raw material costs. The expensive euro, Chinese overcapacity, high US tariff walls and geo-economic uncertainties are also weighing on business.

Markus Steilemann makes a clear appeal to Berlin and Brussels: "We can no longer afford to be confrontational. We must face up to unpleasant truths and look to the future. The transformation of our economy into a competitive and good future will demand a lot from us. It will be a difficult path, but we must take it. With the combined forces of politics, business and society."

Six steps for a sustainable industry

The VCI sees six key areas for action to make Germany and Europe competitive again:

• Secure production sites: Strategically important sectors such as chemicals and pharmaceuticals must be secured in order to guarantee independence, resilience and security of supply in Europe. This requires lower costs, fewer hurdles and faster decisions.
  
  
• Strengthen innovation: If you want to remain competitive, take climate protection seriously and exploit the opportunities of digitalization, you need to invest in research and development. There is currently no political framework in place to ensure that innovation is not nipped in the bud.
  
  
• Prioritize spending: Future investments should flow into education, research, infrastructure, digitalization and future technologies. This forms the basis of a modern industrial policy.
  
  
• Bold reforms: Reforms are needed in energy and climate policy, public authorities and social security systems in order to restore competitiveness and master the transformation to climate neutrality.
  
  
• Credible overall strategy: Germany needs clear priorities and a long-term plan. A reliable industrial policy must promote new technologies and modernize infrastructures.
  
  
• Rethinking Europe: The European community can act on an equal footing with the USA and China. This requires a common industrial policy and defense, a capital market union and a completed single market.

The VCI represents the interests of around 2,300 companies

The VCI is Europe's largest chemical and pharmaceutical association. With 23 specialist and 7 regional associations, it represents the interests of around 2,300 companies - from global players to highly specialized SMEs. With a turnover of 240 billion euros in 2024 and more than 560,000 employees in Germany, the industry is one of the strongest drivers of innovation, prosperity and the future.