Business Climate in Germany’s Chemical Industry Improves Marginally
The business climate indicator for the German chemical industry rose only a little in October. It remained in negative territory at -15.3 points, up from -18.7 points* in September. “Germany’s chemical industry continues to face an extremely challenging business environment,” says industry expert Anna Wolf of the ifo Institute.
The majority of companies continue to rate their current business situation as highly unfavorable at -25.5 points, down from -25.4 points* in September. Chemical companies revised their business expectations upward a little, but remain cautious. “The ongoing discussion about an industrial electricity price is causing considerable planning uncertainty in the chemical industry,” Wolf says. “Although electricity prices have dropped again, they remain high compared to those in other countries.” This explains why the decline in manufacturing costs has not yet had an impact on production.
In October, 48.2% of chemical companies reported that their order situation remains tense. Back in July, that figure was only 40.9%. “Competitive pressure from outside Europe is still rising,” Wolf says. Also causing concern in the chemical industry is capacity utilization, which at 75.1% is well below the long-term average of 80.8% for the period going back to 2020. This is one reason why the industry is planning further staff reductions.
*Seasonally adjusted
