The German chemical and pharmaceutical industry expects a slump in sales and production due to weak demand. The German Chemical Industry Association (VCI) lowered its forecast for the current year on Friday in Frankfurt. He now expects production to shrink by eight percent compared to the previous year. Chemical production alone is likely to decline by eleven percent.
Sales are also likely to fall by 14 percent and by 16 percent in the chemical industry alone. “The hopes that a recovery would set in after a mild winter and significantly lower gas and electricity prices have not been fulfilled,” said VCI President Markus Steilemann. On the contrary, the demand for chemicals is decreasing. So far, the association had expected a five percent drop in production and a seven percent drop in sales.
The weakening economy is causing problems for the important German industrial sector. As a supplier to the automotive, consumer goods and construction sectors, for example, the chemical industry in particular is dependent on the economy. In the first half of the year, production in the chemical and pharmaceutical industry fell by 10.5 percent compared to the previous year. Sales fell by 11.5 percent to 114 billion euros due to weak demand. The chemical and pharmaceutical industry with around 477,000 employees in Germany is also particularly affected by high energy prices. According to the VCI, the industry is the largest German gas consumer with a share of 15 percent, accounting for almost a third of industrial consumption. It needs gas as a source of energy and as a raw material for further processing – for example in plastics, medicines and fertilizers.