German chemical sector recovers loses momentum in Q2, according to industry group

The second quarter saw a slight slowdown in the German chemical sector, according to a report released by VCI, the industry association. Both domestic and international orders, particularly in the pharmaceutical branch, were down in April-June.

In a press statement, VCI's Director Wolfgang Grosse Entrup stated that the global economy had not picked up as fast as expected. He also said that Germany's structural issues, including high production costs and red tape, as well as labour shortages remain unresolved.

The overall production of chemicals, including pharmaceuticals, increased by only 0.8% from quarter to quarter. This is a dramatic slowdown compared to the 5% quarterly growth in January-March.

The German chemicals industry will suffer a lot in 2023 because of high production costs, low demand and high inflation. In the first quarter this year, Europe's biggest chemicals producer began to show signs of recovery. These are now disappearing.

The pharmaceutical industry's output dropped by 4% in the last quarter.

In the comparison of the year, the overall production increased by 3.7% or 8.4% excluding pharmaceuticals, but revenues fell by 0.6%.

The industry still maintains its annual guidance that production volume, including pharmaceuticals, will grow by 3.5% while industrial sales will increase by 1.5%.

(source: Reuters)