Germany's VCI forecasts a 'difficult path', chemical industry stagnating in 2026

By Ozan Ergenay and Anastasiia Kozlova

Dec 10 (Reuters) - German chemicals lobby VCI expects the industry's orders and sales to stagnate in 2026, due to uncompetitive production costs, high regulatory uncertainty and slow approval process.

The association, which represents around 1,900 companies, said revenues in the chemical-pharmaceutical industry fell 1% to 220 billion euros ($256.26 billion) in 2025.

Germany's chemicals sector, the country's third-largest industry employing around half a million people, faces mounting pressure from high production costs, bureaucratic burdens and a stagnating economy, compounded by U.S. tariffs on imported goods.

"Industry is sending out an S.O.S. and 2025 was once again very difficult for our sector, and the outlook isn't getting any brighter," Markus Steilemann, VCI president and CEO of Covestro 1COV.DE, said in a statement.

The crisis in the sector is also reflected in the employment figures, resulting a decrease of 0.5% to 2,400 fewer people working the chemical and pharmaceutical industry this year, according to the statement.

"We can no longer afford confrontation and we must face uncomfortable truths and look ahead. Transforming our economy into a competitive and prosperous future will demand a great deal from us. It will be a difficult path but we must take it, with the combined efforts of politics, business and society," Steilemann said.

He added that the expensive euro, Chinese over-capacity, high U.S. tariffs and economic uncertainty are further weighing on business as well.

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