Market conditions improved modestly, driven more by higher producer prices than by a genuine rebound in production volumes, a pattern that points to continued weakness in underlying demand. Business confidence rose 4.1 points compared with the same period in 2025, supported by an 8.0-point increase in recent production, though both indicators remained in negative territory and employment expectations continued to deteriorate.

Capacity utilisation climbed only gradually, reaching 75.0% in the third quarter, still 6.3 percentage points below the sector's long-term average and noticeably behind the 77.9% recorded across manufacturing as a whole, with Belgium and Germany showing the weakest operating rates and Spain and France performing comparatively better.

Energy costs remain a central constraint on the sector's global competitiveness. European gas prices averaged €45.1 per MWh between January and July, up 15.7% year-on-year, while prices in the United States fell over the same period, widening the EU-US gas price ratio from 2.8 to 3.6, a gap that continues to weigh on investment decisions for energy-intensive production such as basic chemicals and polymers.

Production performance diverged sharply across Member States, with France and Spain returning to growth while output kept contracting in the Netherlands, Germany and Italy, and 'other organic basic chemicals' and polymers remained the weakest-performing segments amid persistent global oversupply.

Trade flows also softened, with extra-EU27 chemical exports and imports both declining during the first half of the year, driven largely by weaker sales to the United States; the trade surplus narrowed to €18.4 billion even as the physical volume deficit improved.

Globally, chemical production growth slowed to 1.5% year-on-year, with China's continued expansion increasingly isolated against contraction across most other major producing regions, including the EU27, Germany, Japan and the United States, underscoring the widening gap between Europe's chemical sector and its fastest-growing global competitors.

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