Quartely report 3/2025

Stocktaking of Q3 2025 is bitter for many companies of the German chemical and pharma industry.

• Production in reverse
• High costs, falling prices, earnings under pressure
• Decline in sales – particularly strong in international business
• Outlook: 2025 without a happy ending

The economic situation further deteriorated, with another drop in production, prices and sales. Capacity utilisation was clearly below the profitability threshold. Chemical undertakings continue to suffer from poor activity of industry overall, overcapacities worldwide and high location costs. The weakness of the chemical industry in the import export business is cause for concern. Sales fell significantly in markets outside Europe while European sales stagnated. Chemistry benefits less and less from growth in other countries. There is no sign of improvement in the short term. Quite the contrary: expectations were gloomier most recently.

Problems also for pharmaceuticals

Lately, matters have not been going smoothly for the pharmaceutical industry either. Price and cost pressure in Germany as well as higher tariffs and tariff threats in the important US market slowed down business.

VCI director-general Wolfgang Große Entrup comments: "The industry is teetering towards the end of the year. There are issues wherever we look for chemicals. Production, sales, prices, capacity utilisation – everything’s in the negative. The federal government knows that the situation is serious. But irrespective of extra funds and some corrections in the course steered in the economic policy, the government has not brought about a trend reversal in the economy. A spirit of optimism for the way forward? By no means. But the chemical industry is not the only one to struggle. Confidence is crumbling also in the pharma business: the erratic US trade policy, tariffs, global price decline – all this adversely affects our pharmaceutical industry locations. One fell swoop of liberation right now would help industry. If nothing is done, the industry in Germany will continue to be crushed between transformation costs and bureaucracy. The knockout is getting ever closer. "

Overview of business figures:

• Forecast: No turnaround for the better is in sight. For 2025 as a whole, the VCI thus continues to expect stagnation in chemical and pharmaceutical production at best. Chemical production is likely to deteriorate by 2 percent which, however, can be partly offset by the pharma industry. Due to slightly lower prices, the industry’s total sales should fall by roughly 1 percent to 221 billion euros.
• Companies cut back production again, i.e. in Q3 2025 production dropped by 0.3 percent compared with the previous three months and was 1.5 percent lower than one year earlier. Capacity utilisation in the chemical industry was only at 70 percent.
• Costs and prices: Producer prices fell despite persistently high costs and were 0.6 percent lower than in the previous quarter for the industry. In consequence, chemicals and pharmaceuticals were 0.6 percent less costly than one year ago.
• Total sales of the industry failed to reach the level of the previous quarter by 1.5 percent. At 51.1 billion euros, they were 2.3 percent lower than 12 months earlier.