FRANKFURT (dpa-AFX) - The German chemical and pharmaceutical industry emerged from its long slump at the beginning of the year. In the first quarter, sales rose by 4.4 percent compared to the previous quarter to 54.8 billion euros, according to the Chemical Industry Association (VCI) in Frankfurt. This means that the industry, which employs around 480,000 people in Germany, has made up for the slump of the previous months.
"If the tariff dispute does not escalate further and the German government implements its announced growth package, the outlook for our industry could brighten as early as this year," said VCI President Markus Steilemann.
In the first quarter, production rose by 6.7 percent compared to the previous quarter, with the chemical industry alone growing by 4.7 percent. In the pharmaceutical sector, it grew by a good 10 percent, probably because customers brought forward orders for medicines out of concern about US tariffs.
Concerns about Trump's tariffs
The VCI attributed the recovery to an upturn in almost all sectors, both in Germany and abroad. The assessment of the current business situation has improved. However, business expectations have clouded over: the US tariff policy is reducing export opportunities for the chemical industry and its customers. In addition, Chinese goods have been increasingly diverted to Europe, increasing the pressure. Pharmaceutical companies fear high tariffs on the important US market.
The association therefore remains cautious for the current year and confirmed its forecast. According to this, production is expected to stagnate and sales to decline slightly by one percent to around 221 billion euros.
Hoping for a new government: "The opportunities are there"
The energy-intensive chemical industry, Germany's third-largest industrial sector after automotive and mechanical engineering, is suffering from high energy prices and the economic slump. Chemical companies such as BASF and Evonik have announced major restructuring programs, are cutting jobs and in some cases shutting down plants.
The VCI is placing its hopes in the European single market. "The opportunities are there. Germany now has a stable government again that holds all the trump cards," said President Steilemann. It must reduce structural deficits and initiate reforms. These include, in particular, significantly lower energy prices, faster bureaucracy reduction, and tax reform. /mne/als/DP/stw
