Economic Challenges Push German Chemical Industry to New Low

Munich — Business sentiment in Germany's chemicals industry fell to its lowest level in more than two years in October, the ifo Institute said on Monday, as weak orders and foreign competition continued to weigh on the sector.

The Business Climate Index for the sector dropped 7.4 points to minus 19.4 points, falling to its lowest reading since July 2023, according to the Munich-based research institute.

"The relief measures taken by the federal government are not sufficient to reverse the trend in the current economic situation," ifo expert Anna Wolf said.

The outlook for the future was assessed particularly negatively, falling 9.6 points to minus 13.3.

Although the current situation reached just minus 25.3 points on the index, the decline here was slightly less pronounced at 5.5 points.

Ifo attributed the decline in part to rising competition from abroad, which is forcing many German companies to lower their prices.

There are now more companies that want to sell their products more cheaply than that plan to increase prices, the institute noted.

The extremely poor order situation, which is at a more than three-decade low of minus 68.9 points, could also be contributing to this.

Wolf said the poor situation is also noticeable in other areas. "The combination of a lack of competitiveness, falling sales prices coupled with high costs and weak orders is forcing companies to cut back on investment and further reduce their workforce," she said.

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