VCI Germany expects the chemical industry to stagnate by 2026

VCI, the German chemicals lobby group, expects sales and orders to stagnate in 2019. This is due to high regulatory uncertainty, uncompetitive manufacturing costs and a long approval process.

The ?association, which represents around 2,300 companies, said revenues in the chemical-pharmaceutical industry fell 1% to 220 billion euros ($256.26 billion) in 2025.

"I don't believe that certain measures will have a significant effect in the?short term but if we don't start today, we'll be right back here at the end of?2026 and asking in 2027 if there would be any impact," Markus Steilemann, VCI president and CEO of Covestro, said on a call with journalists. Markus Steilemann of Covestro and VCI President and CEO, in response to the question of government efforts to stimulate the economy, stated that "I do not believe certain measures will have an impact in the short term. But if we do not start today, then we'll find ourselves right back here in 2026 asking if there is any effect. Germany has implemented a number of fiscal measures to help businesses, including a 500 billion-euro fund for infrastructure and a 46 billion-euro tax relief package.

After the U.S. Tariff War, Europe has become a more attractive market for exports.

Steilemann responded to a question about Chinese competition by saying, "You can think of protective measures for the short-term but in the long run...we need a framework where companies in Europe and Germany can operate in a competitive manner."

A PERFECT STROKE IMPACTS INDUSTRY

According to VCI, the 'crisis' in the chemicals industry is also reflected by the employment figures. This year, 2,400 people, or 0.5% fewer, worked in the chemical and pharmaceutical industries.

"The industry is sending an S.O.S." Steilemann stated that?2025 will be a very challenging year for our industry, and the outlook is not getting any better.

"We have to face the uncomfortable truths, and move forward. It will take a lot of effort to transform our economy into one that is competitive and prosperous. "It will be a hard path, but we must go down it with the combined effort of politics, businesses and society," said Mr. He added.

(source: Reuters)