Industry: German chemical sectors also expect no trend reversal in 2025

The German chemical and pharmaceutical industry is stabilized, but still does not find a powerful recovery from its crisis. In the first half of the year, the turnover of 0.5 percent dropped to 107 billion euros in the previous year, as the Association of the Chemical Industry (VCI) in Frankfurt announced. Production fell by one percent at stagnating prices.

The industry has stopped the rapid descent of the past few years, according to the VCI. However, the companies only expected an upswing in the coming year. “There is no trend reversal for our industry for 2025,” said President Markus Steilemann. Around 40 percent of member companies currently complained about the lack of order.

However, Steilemann feels tailwind from politics. There is a rethink in Berlin and Brussels. “Competitiveness, resilience and reduction in bureaucracy are back on the political agenda.” The new federal government took the first important steps. “Finally, Germany and Europe seem to wake up from their sleeping beauty.”

For example, he called for an industrial current price and the reduction of bureaucracy, which, according to the IFO Institute, costs 146 billion euros annually.

Pharma benefits from Trump’s customs threats

In the first half of the year, the third largest German industrial industry benefited from good pharmaceutical business again after car and mechanical engineering. There, production increased by two percent, while the production in chemistry decreased by three percent with weak utilization. The number of employees remained stable with around 480,000 in Germany – although corporations such as BASF are shut down.

In the first quarter, the chemical and pharmaceutical industry had significant growth in sales and production- also because customers exerted orders out of worry about US tariffs.

No growth in 2025 expected

The VCI confirmed its forecast for this year. Accordingly, production will stagnate and sales will be slightly reduced by one percent. The customs dispute with the USA remains a burden, said Steilemann. “Trump’s protectionism increasingly brings the global economy out of time – with consequences for us too.”

The energy -intensive chemistry has long been suffering from increased energy prices and the stimulus. According to VCI, chemistry produced around 20 percent less in the first half of the year than in the previous crisis year 2018.

Corporations such as BASF and Evonik have already announced large austerity programs including the job cuts. It was only recently BASF and the plastic group Covestro lowered their business forecasts.