Business Climate in Germany’s Chemical Industry Brightens
The ifo Business Climate in Germany’s chemical industry brightened somewhat in February. It rose to minus 18.5 points, up from minus 25.6 points in January, according to the ifo Institute survey. “Germany’s chemical industry is not yet out of the woods. While companies’ expectations were less pessimistic in February, more companies were dissatisfied again with their current situation than in January,” says industry expert Anna Wolf of the ifo Institute.
According to Wolf, this is due both to weak demand and to declining order backlogs. Neither are companies expecting any help from the export business. “Fewer chemical companies are planning to raise their prices. While this may boost demand, it puts even more strain on their already tense earnings if they don’t pass on their production costs to their customers in full,” Wolf says.
However, there were also some bright spots in February. The supply of intermediate products improved noticeably, with only 17.4 percent of companies still reporting bottlenecks. That figure had peaked in December 2021 at 73 percent. And companies want to increase production. The corresponding indicator remained positive for the second time in a row.
