The business climate within Germany’s chemical industry has continued to deteriorate, according to the latest data released by the Ifo Institute. The sector’s corresponding index dropped to -19.2 points in July, a significant decline from -9.5 points recorded in June.
Assessments of the current business situation have also worsened, falling from -26.0 to -28.8 points, marking the lowest level in two years. Future expectations have notably shifted back into negative territory, decreasing from +8.6 to -9.2 points.
“The temporary hope for a cyclical recovery within the chemical industry has faded” stated Anna Wolf, Ifo Institute industry expert.
The ongoing weakness in industrial activity is placing pressure on demand for chemical products, both domestically and internationally. Companies are reporting historically low order backlogs, a figure that has plummeted to levels unseen since the financial crisis of 2009.
Simultaneously, businesses are planning further job reductions and expectations for employment have decreased. The sector is also grappling with persistent geopolitical uncertainties, particularly the negative impact of trade disputes with the United States.
“While the industry has managed to slightly improve its competitive position, the imposition of new tariffs on chemicals and pharmaceuticals is substantially harming business within the US market” Wolf added.
