Production was down 8.8 percent year-on-year in April-June, the VCI said, making for revenues 4.3 percent lower, at 48 billion euros ($53 billion), even as prices rose.

Even omitting pharmaceuticals, where output fell more sharply in comparison to an unusually strong year in 2018, chemicals production fell 3.9 percent.

Looking ahead, "the recovery in German industrial activity expected for the second half of the year isn't materialising," federation president Hans Van Bylen said in a statement.

Around the world, "industrial activity and with it demand for chemical products is slipping ever more strongly into a downward spiral," the VCI added.

Asian growth is slowing as the US-China trade war deepens, while industry is weakening in both Europe and the US.

That has brought falling demand at home and abroad for German chemicals makers, the country's third-largest industrial sector whose products are vital inputs for many manufacturing processes.

Looking ahead to the full year, the VCI now predicts a fall of six percent in chemicals production over the year, significantly worse than its first-quarter forecast of a 3.5-percent fall, while revenues should slump five percent, to 193 billion euros.