European Chemical Production Expected to Decline Further in 2025 Amid Intensifying Industry Pressures

The latest Chemical Trends Report released by the European Chemical Industry Council (Cefic) shows that after a 2.4% contraction in 2024, European chemical production is expected to fall by an additional 2.0% in 2025. The report underscores that persistent uncertainty continues to suppress investment across the sector, with the outlook for 2025–2026 described as 'bleak'. An accelerating wave of chemical plant closures is driving deindustrialisation, benefiting regions with lower operating costs.

Cefic highlights that Europe's chemical industry is facing strong competitive pressure from Asia, while foreign trade, traditionally a key driver of Europe's economic performance, has shown no notable improvement. Industry conditions remain challenging, with companies operating amid complex global economic dynamics. High energy prices and weak market demand continue to exert dual pressure, with energy costs remaining a central concern. European chemical exports are struggling, while the sector simultaneously confronts the challenge of rapidly rising imports. Survey data from EU business and consumer confidence indicators show a significant decline in confidence in the European chemical industry between January and August 2025 compared with the same period in 2024.

In terms of production performance, European chemical output fell by 2.5% year-on-year in the first nine months of 2025, remaining 10% below pre-crisis levels recorded between 2014 and 2019. Among major economies, the Netherlands posted the steepest decline at 6.2%, followed by France at 3.9% and Germany at 3.2%. Prices remained stable, with chemical product prices from January to August aligned with 2024 levels, although sales revenue decreased by 2.3% year-on-year.

On the trade front, European chemical exports fell by 2.3% year-on-year to €148.6 billion in the first eight months of 2025, while imports rose by 2.6% to €123.7 billion. In volume terms, exports reached 61.3 million tonnes, compared with 69.1 million tonnes of imports, resulting in a trade deficit of 7.7 million tonnes.