The 2025 Chemical Industry ForecastThe 2025 Chemical Industry Forecast

This year will prove to be a new endeavor for the chemical industry. Deloitte’s industry outlook report shares that in 2025, the chemical industry is expected to focus on innovation, sustainability, and resiliency to drive efficiency and growth.

The global chemical industry will grow from USD 6.182 billion in 2024 to USD 6,324 billion by 2025 at a YoY increase of 2.3%, Markets and Markets shared in its Chemistry Outlook brief.

In its mid-year report, The American Chemistry Council (ACC) predicts global chemical production will increase possibly up to 3.5% in 2025. Even so, with both outlooks, the increase in production will be welcome.

The ACC report revealed inventory reductions that impacted several industries are likely to abate. This will see a rebound in higher production for different chemical segments. The growth rate in chemical sales in the first three quarters of 2024 showed mixed performance across regions and sectors, indicating that the recovery from the previous economic disruptions is still on.

According to the ACC, US chemical manufacturers reported stable activity levels with overall sales and production improving throughout the year. However, demand was volatile, and notably in Q3, new order volume declined despite strong domestic orders. This decline was primarily attributed to weakened foreign demand, indicating challenges in terms of global economic uncertainty.

Related:EPA & OSHA Partner on Chemical Safety to Protect Workers

The Asia-Pacific region will lead the growth of the chemical industry, Markets and Markets stated, with countries such as India showing strong growth in chemical production. Domestic demand is increasing along with investments in infrastructure and manufacturing. The Eurozone suffered from a high cost of energy and supply chain disruptions in the past but recovered growth in 2024 as energy costs stabilized and economic recovery is growing.

Chemical Industry Forecast

Deloitte’s outlook listed these top trends for the new year:

Markets and Markets sees these four trends spurring growth in 2025:

Related:US Chemical Safety Board Offering Public Serious Chemical Incident Reports

Could the proposed tariff tax increase under the new administration affect the industry? Here is some recent background:

In 2022, the US imported $68.6B in Organic chemicals, mainly from Ireland ($21.7B), China ($13B), Canada ($3.72B), India ($3.54B), and Germany ($3.28B), the Observatory of Economic Complexity (OEC) wrote. In fact, minerals, fuels, oil, and plastics are some of the largest imports to the US. With China seeing a potential 10% tariff hike and Canada (and Mexico) 25%, this could hurt chemical manufacturers, who will bear the brunt of the extra cost (or more aptly, push the cost to its customers).

Related:New York Cannabis Processor Chooses Prodigy Processing Solutions for Equipment

At the time of its report, ACC stated that prospects for US chemistry remained positive with competitive energy fundamentals and the resurgence in US manufacturing legislative initiatives to promote clean energy, infrastructure, and a strong domestic manufacturing base.

However, a large risk to the outlook is the rising regulatory impact on the chemical industry in the US that could undermine competitive advantages in energy and opportunities provided by the manufacturing expansion. As well, the new administration could have an effect on the outlook.

See the full detailed Deloitte chemical industry report here.