VCI notes ‘early signs’ of stabilisation in German chemical sector

Frankfurt, Germany – Germany’s chemical industry remains under severe pressure at the start of 2026, but early signs of economic stabilisation are beginning to emerge, according to a January ‘spotlight’ published by industry association VCI.

Business conditions across the sector are still being assessed negatively, in line with recent macroeconomic indicators, the association said.

Order intake declined further and was most recently 6.7% below year-earlier levels, with both domestic and foreign demand remaining weak

Production continued to contract, while producer prices remained under pressure. Sector revenues also fell sharply, coming in 7% below the previous year, VCI noted.

Despite the difficult backdrop, expectations among chemical companies have “brightened slightly,” pointing to a possible easing of the downturn.

According to the association, “first signs” are emerging that the economic slump may be running its course, supported by rising orders in some customer industries and in the construction sector.

The tentative improvement, said VCI, could help ease the shortage of orders in the domestic chemical market.

According to the German association, capacity utilisation has already “picked up slightly”, while production plans for the coming months are trending upward.

Export sentiment has also improved, with export expectations turning positive for the first time in almost a year, VCI said.

Commenting on the start of the year, VCI managing director Wolfgang Grosse Entrup said the federal government was “on the right track” despite initial difficulties, but warned against complacency.

“The to-do list for a genuine economic upswing is long,” Grosse Entrup said, calling for the same political determination seen on energy prices to be applied to “bureaucracy and taxes.”

He added that Germany’s industrial competitiveness must be restored “through bold reforms”, arguing that “half-hearted steps” would not be sufficient to drive sustainable growth