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German Chemical and Pharma Sector Sees Early 2025 Recovery, Faces Persistent Challenges

Q1 2025 marked a 4.4% revenue boost and 6.7% production growth, but high energy costs and trade-policy concerns temper optimism.

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Overview

  • Germany’s chemical and pharmaceutical industries rebounded in Q1 2025, with revenues rising 4.4% to €54.8 billion and production increasing by 6.7%.
  • Pharmaceutical production surged over 10%, attributed to pre-emptive orders amid fears of potential US tariffs on medications.
  • The Verband der Chemischen Industrie (VCI) highlighted improved business conditions but maintained a cautious outlook for 2025, predicting stagnant production and a slight 1% revenue decline.
  • High domestic energy costs and restructuring by major firms like BASF and Evonik continue to weigh on the sector’s long-term competitiveness.
  • The industry is urging the German government to implement structural reforms, including lower energy costs, reduced bureaucracy, and tax changes, to sustain recovery efforts.