The business climate within the chemical industry saw a strong improvement in June. According to the Munich Ifo Institute, the business climate index rose to -17.8 points, a significant jump from -29.0 points recorded in May. Companies rated the general business situation considerably better, with the balance improving to -2.9 points from -16.5 points in May. Business expectations also brightened considerably, moving from -40.7 points to -31.5 points.
Anna Wolf, an Ifo industry expert, attributed this improvement to the slight decline in energy prices and certain precursor material costs, a trend following the easing of the conflict in the Middle East. Furthermore, the Ifo expert noted that a special effect in international trade contributed to the better figures: supply disruptions from the Middle East and particularly affected Asian markets have caused demand for chemical products to shift toward German manufacturers. Production stabilized throughout the month, and the number of orders received by companies increased compared to the preceding month.
Despite these positive signs, chemical companies are hopeful for higher export volumes than those achieved in May, with the export balance improving to -4.8 points from -16.1 points. However, the supply of precursor materials remains under pressure. Most companies anticipate rising prices in the coming months. Wolf cautioned that a sustainable reversal of trends cannot yet be proclaimed, but she added that a glimmer of hope is finally appearing after a long period.
