Business was weak for the German chemical industry in the final quarter of 2014, industry association Verband der Chemischen Industrie (VCI) said in its latest quarterly report. Between October and December, Germany's third largest industrial segment saw production, prices, sales and capacity utilization fall back against the previous three month period.

While the German economy continued to grow in late 2014, the chemical industry failed to benefit, as customers curbed ordering in anticipation of a further decline in selling prices, the association explained.

Output in the fourth quarter was down 0.3% against the third quarter. The year-on-year comparison saw a decline of 0.8%. Capacity utilization fell slightly to 83.3% percent but remained within the normal range.

Quarterly sales eased off slightly, by 0.4% against the previous quarter and 0.2% against the 2013 quarter, due to falling prices and lower demand. Both in the quarter-on-quarter and year-on-year comparisons, VCI said, chemical prices declined "markedly," by 0.9%. This ended a nine-month period of stable pricing.

For full year 2015 the industry association expects output to rise by 1.5% against 2014. However, as prices are expected to be around 2% lower than in 2014, sales are forecast to fall 0.5% to €192.2 billion.

Explaining the outlook, VCI general manager Utz Tillmann said the chemicals economy should continue improving over the coming months. Against this backdrop, the industry's companies expect moderate business growth in their major sales markets. At the same time, Tillman said, the low oil price and the weak euro will give impetus to the economy.

On the whole, the association manager added, the German chemical industry's economic dynamics will remain slack.