On September 3, 2026, Germany's Chemical Industry Association VCI reported that chemical and pharmaceutical production increased 2.4% quarter-on-quarter in Q2, while sales rose 7.3% to €54.5 billion. Capacity utilization, however, remained at just 73.2%, well below the long-term average of 83%, and VCI maintained its forecast for a 1.5% decline in full-year production.
The second-quarter figures marked an improvement after a prolonged period of weakness.
Production increased by 2.4%, while industry sales rose 7.3% to €54.5 billion.
VCI, however, said the improvement was partly supported by temporary factors.
Companies increased inventories amid concerns about possible supply disruptions linked to the Middle East, while logistics problems affecting suppliers in Asia and the Middle East temporarily redirected some orders toward European producers.
By June, orders and sales had begun to decline again.
Plant utilization remains another concern.
German chemical and pharmaceutical facilities operated at an average of 73.2% of capacity, compared with a long-term industry average of around 83%.
For an industry with high fixed production costs, sustained low utilization continues to weigh on plant economics.
Costs also increased during the quarter.
Producer prices rose 5.7% quarter-on-quarter and 5.3% year-on-year, partly reflecting higher crude oil, naphtha and natural gas prices.
As a result, the increase in industry sales does not necessarily indicate an equivalent increase in physical demand.
Part of the revenue growth came from higher prices rather than stronger volumes.
VCI therefore kept its full-year outlook unchanged.
German chemical and pharmaceutical production is expected to decline by 1.5% in 2026, while sales could rise around 2.5%, largely because of higher prices.
The figures are consistent with broader conditions across European petrochemicals, where improved feedstock availability has not yet translated into a sustained recovery in downstream demand.
For the remainder of the year, orders and capacity utilization will remain key indicators of whether the sector is moving toward a more durable recovery.
