Core Insights - The German Chemical Industry Association (VCI) maintains a forecast that Germany's chemical production (excluding pharmaceuticals) will decline by 2% by 2025, but the actual decline may be more significant [1] - VCI economist Christiane Kellermann indicates that indicators show a more pronounced drop in production, particularly in energy-intensive basic chemicals and specialty chemicals [1] - Domestic and export orders in the German chemical industry are weak, and sales figures are low, despite some factory closures and persistently low capacity utilization [1] - There is a possibility of further capacity shutdowns in the basic chemicals sector due to low capacity utilization and rising import pressures [1] - Germany needs to enhance its competitiveness as a business investment location by addressing high energy, raw material, and labor costs, as well as reducing heavy tax and regulatory burdens [1] - Certain government and EU policies imposing restrictions or bans on specific chemicals or materials have added pressure on the German chemical industry, such as the restrictions on per- and polyfluoroalkyl substances (PFAS) [1] Future Outlook - For 2026, VCI predicts an improvement in chemical production and sales, primarily based on government-announced defense and infrastructure spending plans [2] - However, the actual effectiveness of government measures remains uncertain, and the pace of necessary reforms is deemed insufficient [2] - There is a cautious attitude from VCI and skepticism from businesses regarding the anticipated improvements [2]