Business Climate in the German Chemical Industry Deteriorates

The ifo Business Climate in Germany’s chemical industry worsened in December 2023. It fell to -15.2 points, down from -13.0 points* in November. “Although the chemical industry seems to have bottomed out, there is still no sign of an impending upturn,” says industry expert Anna Wolf from the ifo Institute. Companies were less negative about their current business situation in December than in the previous month. However, their business expectations deteriorated significantly to -14.6 points, down from -6.5 points* in November.

Chemical companies rated their order backlog as very low. They had recently been pinning their hopes on international business. These hopes have apparently been dashed, however, as expectations regarding orders from abroad have worsened. Companies’ pessimism is also reflected in their personnel planning. Expectations here are at their lowest level since the 2008/2009 financial crisis. “The chemical industry faces the prospect of even greater job losses,” Wolf says.

The business climate cooled in other energy-intensive industries as well. In basic metals manufacturing, the indicator tumbled to -44.9 points, down from +2.6 points*. The Business Climate Index fell noticeably in the paper industry, in coke and refined petroleum production, and among manufacturers of glass, ceramics, stone, and other nonmetallic mineral products.

*Seasonally adjusted