German chemicals lobby warns growth drift to Asia is hurting recovery

Germany's chemical industry expects production, including pharmaceuticals, to fall 1.5% in 2026, its main lobby group VCI said on Thursday, warning that weak European demand and a broader shift in growth and investment towards Asia are undermining hopes of a sustained recovery.

The association forecast another year of declining output as weak sales volumes, rising costs and subdued investment continue to weigh on the sector, a key pillar of Germany's manufacturing economy.

Production in Germany's chemical and pharmaceutical industry fell 3% in the first half of 2026, while sales declined 1% to 106 billion euros ($123.4 billion), VCI said. Producer prices rose 2%.

"The half-year results are disappointing," VCI President Markus Steilemann said in a statement.