Germany's chemical sector has suffered its worst year since the oil crisis of the mid-1970s, with output slumping by 10 per cent due to the global recession, the VCI industry association said yesterday.

"One of the most difficult years in the history of the German chemical industry is nearing its end," Ulrich Lehner, head of the VCI, told a news conference.

"The decline in chemical production can be compared only with the situation in the first oil crisis some 35 years back," he said.

"Our industry was hard hit by the massive drop in global industrial production and the resulting weakness in the demand for chemical products in Germany and abroad."

Sales of chemicals were on course to fall 12.5 per cent to €154.4 billion this year, exports by 12 per cent to €123.2 billion, and domestic sales by 13.5 per cent to €69 billion.

Looking ahead, Mr Lehner said the mood in the industry was "largely confident", with most production plants going back into operation in the second half of 2009 and firms hoping for better conditions in 2010.

"However, we cannot simply forget about the crisis: our capacity utilisation remains unsatisfactory, and the production level - on the annual average - corresponds to the level of 2004," Mr Lehner said.

Production is expected to inch up around five per cent in 2010, the VCI said.