Quarterly Report Q4/2024 of the German Chemical Industry Association (VCI)
The German chemical and pharmaceutical industry ended 2024 with significant challenges. Economic recovery remained a challenge in both Germany and Europe, and demand for German-made chemicals stayed weak, particularly in the European market.
- Chemical and pharmaceutical production dropped by 4.2% from the previous quarter and 1.2% year-over-year. Capacity utilization fell to 74.7%, below profitability thresholds.
- Prices for chemical and pharmaceutical products remained stable, slightly below 2023 levels.
- Total industry revenue rose marginally (0.3%) in Q4 to €53.1 billion, driven by exports outside Europe, particularly to North America. However, domestic sales fell by 1.4% and remained significantly below 2023 levels.
- Employment in the sector held steady at around 480,000 jobs, sustained by pharmaceutical sector growth, though chemical industry jobs saw slight declines.
Outlook
The VCI now looks to the new government for bold reforms to restore competitiveness. Rising energy prices, structural issues, and uncertainties from U.S. trade policies under Donald Trump continue to unsettle businesses. The VCI welcomed the swift coalition negotiations and initial steps on tax policy, electricity prices, and bureaucracy reduction but insists on further improvements, particularly in prioritizing European cooperation and infrastructure investments.
Despite a weak Q4, the VCI maintains its 2025 forecast: production will stagnate as pharmaceutical growth offsets chemical industry declines. Overall, industry revenue is expected to fall by 1%. The VCI expects no major recovery before 2026.
- German Chemical Industry Association (VCI), Frankfurt, Germany
