German chemical lobby VCI reports quarterly sales and production decline amid tariff uncertainty

The German chemical industry association reported on Wednesday that the second-quarter production, sales and prices had declined, citing uncertainty regarding U.S. tariff policies.

VCI said that pull-forward effects on business with the United States decreased throughout the period of April-June, because exports were brought forward to prepare for tariffs on European goods.

The overall production of the chemicals sector, including pharmaceuticals, fell by 3.8% from quarter to quarter. This is in contrast with the 6.7% quarterly increase between January and March.

In a press release, VCI managing director Wolfgang Grosse Entrup stated that "weak demand, decreasing sales, and production well below pre-crisis level" are the reality of our industry, as well as many other parts of German Industry.

This sector, which is the third largest industry in Europe's economic superpower Germany, can be viewed as a bellwether of the wider economy, as it produces material used in sectors such as automotive, construction, agriculture, and textiles.

The pharmaceutical output dropped by 5.6% in comparison to the previous quarter.

In an annual comparison, the overall quarterly production fell 3.1% or 5.1% excluding pharmaceuticals, while revenue dropped by 2.7%.

The industry has maintained its guidance that production volumes, including pharmaceuticals, will fall by 2% in 2025 and industrial sales will drop by 1%. Bartosz Dabrowski in Gdansk and Cian Muenster report.

(source: Reuters)