Economic crisis in the Altötting district: chemical industry on the brink!

Economic crisis in the Altötting district: chemical industry on the brink!

The economy in the Altötting district is currently on the brink. The situation is worsening dramatically, especially in the chemical industry, which is of central importance to the region. The decline in demand, increased energy costs and excessive bureaucracy are causing considerable problems for many companies. Only 28% of companies can report good business, while 26% rate their situation as bad Innsalzach24 communicates.

The IHK Munich and Upper Bavaria also warns of a rapid recovery. The mood on the labor market is currently alarming, similar to what it was at the beginning of the corona pandemic. Over half of businesses are suffering from a lack of demand — a situation that needs to be taken into account more than ever. In these difficult times, employment is stumbling: around 33% of companies expect their number of employees to decline, which could further increase unemployment in the region.

Job losses and uncertainty

In addition, the falling sales at large corporations are causing a domino effect that is also putting a heavy burden on suppliers. The VCI, the voice of the chemical industry, reports a general weakness in sales in the German chemical industry in 2024. Even if production volumes have increased slightly, the industry is struggling with a massive decline in sales prices. It is also worrying that companies like Evonik and BASF are planning drastic job cuts. Evonik will cut 2,000 of 33,000 jobs worldwide, while BASF plans to close several factories, which could cost thousands of jobs, it said daily news.

The uncertainty among employees has a negative impact on purchasing power and consumer sentiment, which in turn puts a strain on local retail and restaurants. In addition, only 10% of companies expect their employees to grow. A ray of hope? The region still offers potential, especially through innovative founders and medium-sized companies that could perhaps prove to be a savior in times of need.

The main problems of the industry

The industry bosses primarily blame high energy costs, complex government regulations and expensive taxation for the misery. One in six chemical companies is planning to shut down production facilities and one in five will divest from certain business areas. As a result, more companies are moving their production abroad, with North America, China and Southeast Asia becoming the primary focus. Excessive bureaucracy is now being criticized everywhere as the main obstacle to investment.

With a clear focus on necessary reforms, the VCI advocates an “economic policy liberation” in order to restore the industry's competitiveness and overcome the crisis.