German chemicals sector sees turnover fall 5.2% in second quarter

The German chemicals and pharmaceutical sector suffered significant setbacks in the second quarter of the year, with turnover down 5.2% as Europe's largest economy struggles to kick into gear.

Due to low demand, production facilities were only operating at 71.7% capacity, the German Chemical Industry (VCI) trade group said on Wednesday.

An expected turnaround failed to materialize as orders dropped even further, the association warned.

The German chemicals sector's customers include the crucial automotive and construction industries.

VCI managing director Wolfgang Grosse Entrup is counting on the German government under Chancellor Friedrich Merz to reduce bureaucracy and resolve structural issues, after focusing on foreign policy during its first 100 days in office.

"The chancellor's firefighting efforts on the international stage were correct and important," he said. "In the second 100 days, the government must start the spectacular catch-up that it promised."

The industry's turnover was 5.2% lower than the previous quarter. At €52.2 billion ($60.8 billion), it was also 2.7% lower than a year earlier.

Despite the weak development, the association is sticking to its forecast for the year as a whole.

Turnover is expected to fall by around 1% with stagnating production and falling prices. There are no signs of a turnaround in either domestic or international business.