German Chemical Industry Continues to Contract in H1
The VCI said 45% of member firms plan to cut domestic investment as weak exports and high costs pressure earnings.
- On Thursday, the German Chemical Industry Association reported that Germany's chemical and pharmaceutical sector contracted in the first half of 2026, with production falling 3% and revenue declining 1% to 106 billion euros.
- High domestic operating costs, intense international competition, and weak exports continue to pressure the industry, which struggled through 2025 with production and sales declining by 0.5% and 1%, respectively.
- A survey by the VCI found that 45% of firms plan to reduce domestic investment, while 40% intend to increase overseas spending amid political uncertainty and high costs.
- For the full year, the VCI lowered its production forecast to a 1.5% decline, reversing earlier expectations that the sector would remain unchanged throughout 2026.
- Representing around 2,300 companies, the VCI urged the German government to pursue a reform agenda including more competitive corporate tax rates, lower labor costs, and reduced bureaucracy.
11 Articles
11 Articles
German chemicals lobby warns growth drift to Asia is hurting recovery
Germany's chemical industry expects production, including pharmaceuticals, to fall 1.5% in 2026, its main lobby group VCI said on Thursday, warning that weak European demand and a broader shift in growth and investment towards Asia are undermining hopes of a sustained recovery.
German Chemical Industry in Crisis Despite Reprieve, Lobby Says
Germany’s chemical industry remains in a structural crisis despite a brief breather when the conflict in the Middle East triggered stockpiling and hit rivals in Asia harder, according to the industry’s VCI association.
The Star Kuala Lumpur
XinhuaGerman chemical industry continues to contract in H1
FRANKFURT, July 16 (Xinhua) -- Germany's chemical and pharmaceutical industry continued to contract in the first half (H1) of 2026, with both production and revenue declining from a year earlier, the German Chemical Industry Association (VCI) said on Thursday.
The sales of the chemical industry fell by one percent in the first six months compared to the previous year, while production fell by three percent. "We now need massive political decisions," says VCI's Chief Executive Officer Wolfgang Große Entrup.
The half-yearly balance of the Association of Chemical Industry is negative. Production and sales in Germany have declined.
The industry association sees no change in trend and again lowers the forecast for 2026. Now the VCI takes the federal government into the obligation.
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