German Chemical Production and Sales May Decline in 2024

Recently, the German Chemical Industry Association stated that it expects German chemicals (excluding pharmaceuticals) output and sales to fall by 1% and 5% respectively in 2024, due to further reductions in chemical business orders.

Production of chemicals, including pharmaceuticals, is expected to remain at 2023 levels, while sales are expected to decline 3%. German Chemical Industry Association said: "The German chemical industry remains in recession at the end of 2023. Current business conditions and expectations for the coming months are negative."

Among the companies participating in the German Chemical Industry Association survey, 45% believed that the situation would improve as early as 2025, 40% complained about declining profits, and about 15% have already incurred losses. German Chemical Industry Association said: "Falling sales, lower selling prices and high production costs have put tremendous pressure on company profitability. At the same time, continued difficult operating conditions have forced many companies to make painful adjustments."

Dr. Scherven, CEO of Covestro and President of German Chemical Industry Association, said: "We are in a long, deep valley, and it is unclear how long it will take to get through it. The longer this goes on, the more factories we have to shut down." In addition, German Chemical Industry Association said it did not rule out the possibility of abandoning loss-making business areas, investing abroad or laying off staff.

Chemicals production excluding pharmaceuticals fell 11 percent in 2023, while chemicals production including pharmaceuticals fell 8 percent, in line with expectations, German Chemical Industry Association said. Capacity utilization was approximately 77%, below the economically necessary base capacity utilization rate of 82% for nine consecutive quarters. Manufacturers of inorganic base chemicals as well as soaps, detergents and cosmetics saw a 10% reduction in production in 2023, while fine chemicals and specialty chemicals saw a 4% decline in production. The German Chemical Industry Association said the entire German economy is suffering from a weak business environment and structural problems, and there is an urgent need for profound policy changes and a focus on competitive economic sectors to ensure a sustainable future