Despite continuing challenges, German industry continues to face unfavorable business conditions.
The situation in the German chemical sector has taken a turn for the worse. According to data collected by the Ifo Institute, companies assessed their current business situation in September at a dismal -9.3 points and their future outlook even more pessimistically at -17.8 points. As per Ifo industry expert Anna Wolf, "Both cyclical and structural factors are causing problems for businesses in the chemical industry."
We've hit rock bottom in Germany's manufacturing scene since June 2020. This slump has resulted in a decrease in domestic demand for chemical goods and an exacerbation of delivery delays. Companies have minimized their production and adjusted their production plans accordingly. Export forecasts are tentative. Due to reduced demand, most companies are forced to lower their prices, and they're taking a closer look at their profit margins. As Wolf explains, "Companies are also grappling with the energy transition, red tape, and escalating labor costs."
The chemical industry's struggles have led the German government to convene an emergency meeting of The Commission to discuss potential solutions. Despite these challenges, many companies in the sector are actively exploring new markets and products to mitigate their losses.
