After a difficult year, the German chemical and pharmaceutical industry expects production to fall sharply again. According to the Association of the Chemical Industry (VCI) in Frankfurt, production will fall by five percent in 2023. Industry sales are also likely to fall by seven percent if prices fall. Chemistry without pharmaceuticals is likely to be hit harder: Here, the association forecast a drop in production of eight percent and a significant drop in sales of ten percent.
In the past year, the third-largest German industrial sector after car and mechanical engineering has felt the effects of rapidly increasing energy costs, especially for gas. In addition, the weak economy made things difficult for her. The downward trend continued in the final quarter. The industry giant BASF reacts by cutting thousands of jobs and shutting down chemical plants at the main plant in Ludwigshafen.
The production of the chemical and pharmaceutical industry shrank by 6.6 percent in 2022 compared to the previous year, the production of chemicals alone collapsed by almost twelve percent, reports the VCI. Thanks to the sharp rise in prices, the entire industry turnover jumped by almost 17 percent to a record value of 265 billion euros.
In the meantime, the situation for the chemical and pharmaceutical industry has brightened up, explained the VCI with a view to the recent significant fall in energy and raw material prices. “The bottom seems to have been reached.” The industry got off lightly, said general manager Wolfgang Große Entrup. However, unlike after the corona pandemic or the financial crisis, a powerful recovery is not expected. Among other things, the high energy costs in an international comparison and a lack of orders speak against it.
