German chemical exports slump as industry warns over competitiveness

Frankfurt, Germany – Germany’s chemical and pharmaceutical industry reported a “significant decline” in overseas business at the start of 2026, with exports falling across all regions compared with a year earlier, according to monthly economic data released 29 April by industry association VCI.

The association said the sector had failed to benefit from growth in other world regions, while pharmaceuticals also showed a weak start to the year, with only North America remaining “robust.”

“A closer look shows that in the first months of the year, chemical exports in all regions were below the previous year’s level,” VCI said in its monthly Schlaglicht Chemie & Pharma report.

According to the group, Germany’s declining competitiveness is making it harder for companies to sell “Made in Germany” products globally.

It cited “high energy prices, regulatory burdens and slow approvals” as major obstacles, adding that too few reforms had so far been introduced in Germany and Europe to improve competitiveness.

VCI also warned that the effects of the Iran war, including rising production costs, were creating further headwinds, while continued aggressive US tariff policy was causing persistent uncertainty in international markets.

Business expectations for the coming months were correspondingly subdued, it added.

Based on latest figures from the ifo Institute, business expectations in the sector “deteriorated massively” in April, with export business viewed “with great scepticism.”

VCI welcomed recent moves by the European Union to intensify trade policy activity and accelerate free trade agreements, but said such initiatives would only open new sales opportunities if accompanied by deeper domestic reforms.

VCI director general Wolfgang Grosse Entrup said conditions for a successful industrial base in Germany had been deteriorating for years.

“That is why we are not benefiting from growth in other world regions,” he said.

“High costs and paralysing bureaucracy are dragging down the former export world champion. Germany is continuing to fall behind as an industrial location.”

He added that policymakers were still moving at a “snail’s pace” and delaying overdue reforms.

“Our industry urgently needs relief. Otherwise, Germany’s once-strong export dynamism could soon be finished,” Grosse Entrup said.

VCI represents around 2,000 chemical and pharmaceutical companies in Germany. The sector generated €240 billion in sales in 2024 and employs more than 560,000 people, the association said.