FRANKFURT, July 16 (Xinhua) -- Germany's chemical and pharmaceutical industry continued to contract in the first half (H1) of 2026, with both production and revenue declining from a year earlier, the German Chemical Industry Association (VCI) said on Thursday.
The sector's production fell by 3 percent year on year in H1, while revenue declined by 1 percent to 106 billion euros (about 121.5 billion U.S. dollars), according to the VCI.
For the full year, the association lowered its production forecast to a 1.5 percent decline, worse than its estimation of remaining unchanged at the beginning of the year.
Many production facilities continue to operate below capacity, while exports remain weak and earnings are under pressure from high costs and intense international competition, the VCI said.
The association urged the German government to pursue a determined reform agenda to strengthen the country's industrial competitiveness. Its key demands include more competitive corporate tax rates, lower labor costs, and less bureaucracy.
High domestic operating costs and political uncertainty are prompting many companies to shift investment abroad, the association said. A survey of its member companies found that 45 percent of firms plan to reduce domestic investment, while 40 percent intend to increase overseas spending.
According to the VCI, the industry had a difficult year in 2025, with production and sales declining by 0.5 percent and 1 percent, respectively.
The VCI comprises 23 specialized associations and seven regional associations in the chemical and pharmaceutical industry, representing the interests of around 2,300 companies.
