Germany's VCI expects chemicals industry to stagnate in 2025 (updated)
13/12/2024 11:36
(Adds conference call, Evonik job cuts in paragraphs 6-7)
By Chiara Holzhaeuser and Ozan Ergenay
Dec 13 (Reuters) - Industry lobby VCI said on Friday it
expects German chemicals industry orders and sales to stagnate
in 2025 as high producer prices and low order backlogs weigh on
revenues.
The association, which represents around 1,900 companies,
said revenues in the chemical-pharmaceutical industry decreased
by 2% to 221 billion euros ($231 billion) in 2024, as prices
decreased and sales in Germany were down by 4%.
The industry suffered from high production costs and weak
demand throughout 2023. Some companies flagged tentative signs
of recovery in early 2024, but that optimism has since faded as
high costs and labour shortages continue to weigh.
"It's a gloomy assessment. The only silver lining is that
the rapid downturn of the last two years has not continued,"
said VCI President Markus Steilemann, who also serves as chief
executive for Covestro 1COVG.DE .
VCI said orders were scarce in 2024, leading to production
facilities not operating at full capacity. "As a result, some
facilities have been permanently closed in recent months.
Further shutdowns are likely to follow," it added.
In a conference call, VCI president Steilemann said he
expected the number of jobs in the sector in Germany to fall in
2025, without giving further details.
Earlier on Friday, German chemicals maker Evonik EVKn.DE
said it might cut its workforce by more than a fifth.
Germany is lagging behind other countries due to high
production costs and increasing bureaucracy, VCI said, adding
that the current economic situation was prompting members to
reduce their budgets in Germany and increase investments abroad.
($1 = 0.9553 euros)
(Reporting by Chiara Holzhaeuser and Ozan Ergenay, Editing by
Friederike Heine and Alexander Smith)
((Chiara.Holzhaeuser@thomsonreuters.com;))