Chemical Industry’s Business Climate Deteriorates in May, Ifo Index Shows
The business climate in Germany’s chemical industry has worsened in May, according to the Ifo index, which fell to -16.5 points, a decline from the previous month’s -14.2 points.
Companies in the sector evaluated their current business situation at -26.0 points, a significant drop from the April figure of -16.2 points. However, their expectations rose to -6.4 points, up from -12.2 points in the previous month.
“The US tariffs and structural problems are weighing on the chemical industry” said Ifo sector expert Anna Wolf.
Chemical companies continued to rate their order books as extremely low and their export expectations also sank further into the negative in May. German chemical companies, in their own assessment, have continued to lose ground in the global market, both within and outside of Europe.
Weak demand and increasing trade barriers are affecting their businesses abroad, forcing local companies to make price concessions and cost-cutting programs. As a result, the chemical industry is planning for reduced production and fewer employees in the coming months.
“The path to stable growth remains arduous for the chemical industry – the only slightly mitigating factor at present is the more stable energy prices” Wolf said.