The business climate in Germany’s chemical industry deteriorated sharply in March. The Ifo industry indicator dropped to -25.0 points from -16.7 in February. Companies rated their current trading conditions even lower, at -31.9 points versus -21.2 in February. Sentiment also fell sharply, slipping from -12.1 to -17.9 points.
“The effects of the war in the Middle East are hitting the already struggling chemical sector hard” said Ifo industrial expert Anna Wolf. The industry had already been suffering from a pronounced shortage of orders before the Iran war, a problem that worsened further in March. Rising costs for crude oil, raw materials and energy add to the pressure, and firms plan to raise prices considerably to offset these increases.
At the same time, employment expectations plunged to a historic low of -32.1 points. “Companies can influence the difficult conditions only little, so the only action left for them is to cut jobs” Wolf said.
