WASHINGTON, D.C. — The American Chemistry Council (ACC) has revised its 2025 growth forecast for the U.S. chemical industry, projecting a modest 0.3% increase in output, a significant downgrade from the 1.9% growth anticipated in December 2024. This adjustment reflects mounting concerns over trade policy uncertainties and their ripple effects across the sector.
The ACC attributes the deceleration to pervasive ambiguity surrounding trade policies, particularly tariffs, which have led many firms to delay orders, investments, and hiring decisions. “Pervasive uncertainty about trade policy and its potential impact has slowed economic activity in the U.S. and abroad,” the ACC stated in its midyear outlook. “The lack of clarity makes it difficult for firms to make decisions, and as a result, orders, investment and hiring have been delayed as many firms adopt a ‘wait and see’ position.”
This cautious stance among chemical manufacturers is further evidenced by recent declines in production and capacity utilization. According to the ACC’s Weekly Chemistry and Economic Trends report, chemical production fell for a second consecutive month in May 2025, down 1.0% following a 0.7% decline in April. Capacity utilization also decreased to 80.6%, indicating underused production capabilities.
The global context adds another layer of complexity. While the ACC projects global chemical production to expand by 1.9% in 2025, this marks a slowdown from the 4.0% increase observed in 2024. Factors such as geopolitical tensions, evolving regulations, and shifting consumer preferences contribute to this tempered outlook.
In response to these challenges, chemical companies are exploring strategies to enhance resilience and competitiveness. According to Deloitte’s 2025 Chemical Industry Outlook, firms are focusing on cost efficiency, innovation, and sustainability to navigate the uncertain landscape. Investments in digital technologies, such as artificial intelligence and predictive analytics, are being leveraged to improve operational efficiency and develop more sustainable products.
Despite the headwinds, certain segments within the chemical industry show signs of resilience. Specialty chemicals, driven by demand in sectors like energy storage, healthcare, and semiconductors, are forecasted to grow by 5% in 2025, outpacing overall chemical production.
However, the broader industry remains cautious. The ACC notes that chemical industry employment is expected to contract by 0.1% in 2025, reflecting the sector’s conservative approach amid economic uncertainties.
As the U.S. chemical industry navigates this complex environment, stakeholders will closely monitor policy developments and market trends to inform strategic decisions. The industry’s adaptability and commitment to innovation will be critical in overcoming current challenges and positioning for future growth.
