en.Wedoany.com Reported - Germany's chemical and pharmaceutical industry remained mired in difficulties in the first half of 2026, with both production and sales declining. According to the latest half-year results released by the German Chemical Industry Association (VCI), industry output fell by around 3% year-on-year, while sales dropped by 1% to €106 billion. Particularly concerning is that capital investment in real estate, plant, and equipment has declined for the third consecutive time, now 15% lower than the 2023 level.
VCI President Markus Steilemann described the results as "disappointing" and emphasized that a slight uptick does not signify a sustainable recovery. "We are merely catching our breath, not turning a corner," Steilemann said. The VCI attributes the temporary stabilization of domestic business to special geopolitical factors, such as the closure of the Strait of Hormuz, which briefly eased competitive pressure from Asia. Additionally, companies are stockpiling in advance to prepare for potential supply bottlenecks that could arise from a Gulf War.
Despite these temporary effects, many companies continue to face difficulties. The industry's export performance remains weak, and numerous production facilities are operating below capacity. The VCI expects full-year production to decline by 1.5%. Germany is under immense pressure in international competition: high energy and production costs, coupled with bureaucratic hurdles, are seen as key investment barriers. Particularly alarming is Germany's extremely low net investment rate, which a study shows currently accounts for only about 0.2% of economic output. Capacity across Europe is declining, while there is insufficient investment in future technologies.
The VCI is calling for comprehensive structural reforms to safeguard Germany's competitiveness as an industrial location. Steilemann emphasized that the federal government's reform package represents "the first serious attempt in years" to reduce regulatory obstacles. The association urges the implementation of competitive corporate taxes, lower labor costs, faster approval processes, and reduced bureaucracy to improve the unfavorable conditions. Despite current challenges, the VCI still sees significant potential for Germany as an industrial location. "Germany has an industrial base and innovative strength," Steilemann said. "Now is the time to leverage these advantages once again." The association calls for a shift in mindset, greater willingness to change, and a stronger sense of individual responsibility to seize the opportunities presented by the transformation.
