Morale in the German chemical industry improved only a little in October, the Ifo economic research institute said on Tuesday, as stubbornly high electricity prices and competition from abroad weigh on the sector.

"Germany's chemical industry continues to face an extremely challenging business environment," said Ifo industry expert Anna Wolf.

The institute's indicator for the sector came in at minus 15.3 points for the past month, up from minus 18.7 points in September.

Despite a recent drop, electricity prices remained high compared to other countries, Wolf said in a statement.

"Competitive pressure from outside Europe is still rising," she said.

In October, 48.2% of chemical companies said that their order situation remained tense, up from 40.9% in July. (Reporting by Linda Pasquini, Editing by Rachel More)