The business climate in the chemical industry dimmed significantly in April. Data from the Ifo Institute revealed that the business climate index dropped to -29.0 points, a decline from -25.1 points registered in March. This marks the lowest reading in almost three years. While companies currently rate their immediate business situation slightly better-at -27.1 points, up from -31.2 points the previous month-their expectations for the future plummeted, falling to -30.9 points from -18.6 points.
According to Ifo industry expert Anna Wolf, the chemical sector is looking extremely pessimistic about the future, despite some positive signs in ongoing business operations. Current turbulence in global supply chains, cited as being partly triggered by the Iran crisis, has created a paradoxical situation during April. On one hand, companies report an increase in incoming orders as consumers switch toward domestic products. On the other hand, roughly one in three companies struggles with material shortages, and chemical prices have risen, with businesses anticipating further price increases.
However, companies view this elevated demand as temporary. For the coming months, they are planning for reduced production, and employment plans remain restrictive. Wolf concluded that the slight improvement in the business situation observed in April is primarily reflective of disrupted supply chains rather than the foundation for a sustainable recovery.