Germany’s chemical industry ended 2025 under increasing strain, with manufacturing, cost and sales all decreasing within the final quarter.
All these emphasize the sector’s intensifying downturn in spite of modest support from the nation’s robust pharmaceutical business, as per Verband der Chemischen Industrie, Europe’s largest association for the chemical and pharmaceutical industries.
The circumstance stayed worried throughout the chemical and pharmaceutical industries in the last 3-months of the year. Although a few of large orders triggered a quick recovery within some industrial clients, the wider chemical sector persisted its slide. Manufacturing, costs and sales all fell once again, and capability usage remained beneath the break-even point.
Pharmaceutical corporations furnished a rare vivid spot. Strong growth in the sector supported stabilize the overall performance of the industry. Yet even here, concern is growing as corporations confront growing pressure from a weak industrial economy, imports and fierce price competition.
Geopolitical tensions are adding to the stain. The warfare in Iran is making recent risks for global supply chains, specially through the blockade of the Strait of Hormuz. Industry leaders warn the effect could expand properly beyond oil and gas supplies.
Corporations are gradually concerned about extreme shortages of main raw materials which include ammonia, phosphate, helium and sulfur. Early symptoms of disruption are already showing up in international supply chains.
No turnaround in sight
Industry leaders see some signal of a brief recovery for Germany’s chemical region. Government comfort measures have begun to reach factories and are extensively reviewed as not enough to offset structural disadvantages dealing with the nation as an industrial location.
VCI Managing Director Wolfgang Große Entrup published a stark warning about the sector’s outlook.
“The chemical industry’s yearly results are abysmal – manufacturing, sales, and prices are all in the red. Pharmaceuticals, with a solid increase, is a vibrant spot. After the change of government, we had expected for notably more. Corporations are highly pissed off with the sluggish economy policy course correction. 2026 will not be any easier.
“Even before the Iran-Iraq War, there was no sense of optimism. The longer the warfare lasts, the more extreme the effects. High prices and ongoing uncertainty are pushing many businesses to their limits. Strategic planning is becoming gradually more difficult. In spite of, corporations are working on a brief-term basis. The world order is being redefined. Europe is facig difficulties to find its bearings. Germany is improving at a considerable pace. Without a genuine will to reform and considerable momentum in Berlin and Brussels, a structural collapse of the industrial base is imminent .”
Key figures
Forecasts for 2026 continue to be unsure because the warfare with Iran adds further uncertainly to an already fragile outlook.
Overall manufacturing in the chemical and pharmaceutical industries increased 0.9% in the fourth quarter of 2025, driven wholly by robust growth in pharmaceuticals. Output was 1.9% better than a year earlier.
Chemical manufacturing, moreover, fell significantly, falling 2.9% as compared with the preceding year and remaining at a very low level. Capacity utilization in chemical plants averaged just 72.5% in 2025, well underneath healthy levels.
For the full year, total industry manufacturing decreased by 0.5%. Chemical output decreased by 3.3% at the same time as pharmaceutical manufacturing increased by 4.5%.
Price pressure also strengthened. Manufacturer expenses within the sector have been primarily unchanged in the fourth quarter but stood 0.6% percent below a year earlier. Chemical prices persisted to slide, specially due to developing import pressure, at the same time as costs stayed high compared with international competitiors.
Sales also weakened. Total industry sales decrease 0.6% within the fourth quarter as compared with the earlier sector, achieving €51.8 billion—2.8% below the level recorded a year earlier.
Domestic sales dropped to €18.9 billion after seasonal adjustment, down 2.3%. International business demonstrated a slight recovery compared with the previous quarter, reaching €32.9 billion, however still remained 2.7% under the preceding year’s level, underscoring the sector’s weak price competitiveness.
For 2025 as an whole, the chemical and pharmaceutical industries formed mixed income of €220 billion, a decline of 1.4%. Chemical sales decreased 3.8%, while pharmaceuticals grew by 5.5%.
Domestic sales totaled €83 billion, with international markets accounting for €136 billion.
