German chemical industry shrinks further amid falling production and revenue

Germany's chemical and pharmaceutical industry is facing a continued downturn, with production falling by three percent in the first half of 2026 compared to the same period last year. The industry association VCI reported that revenue also decreased by one percent, reaching 106 billion euros.

This marks the third consecutive year that investments within the sector have declined. The VCI has consequently revised its full-year forecast for production, now anticipating a 1.5 percent contraction, a significant downgrade from its earlier projection of stagnation at the beginning of the year.

Several factors are contributing to the industry's struggles. Many production facilities are operating below capacity, export demand remains weak, and profitability is under pressure. High operational costs and intense international competition are cited as major challenges.

The current situation paints a challenging picture for one of Germany's key industrial sectors, raising concerns about its future competitiveness and growth prospects.