The global chemical industry is expected to grow from $6,182 billion in 2024 to $6,324 billion in 2025, representing a 2.3% year-over-year increase, according to a report by MarketsandMarkets™.

After facing significant challenges in 2023, including fluctuating energy costs, rising feedstock prices, and geopolitical tensions such as the Russia-Ukraine war, the chemical industry began recovering in 2024. Lower energy prices and renewed demand from key sectors, including semiconductors and automotive production, fueled this rebound. The American Chemistry Council reported a 3.4% increase in 2024 production, with similar growth projected for 2025.

By 2025, several trends are expected to drive further growth. Digital technologies like artificial intelligence and predictive analytics will enhance efficiencies, reduce waste, and support the development of sustainable, high-performance products. Companies will also focus on specialty chemicals, which offer higher profit margins by meeting specific market demands.

The Asia-Pacific region is projected to lead global growth, driven by strong domestic demand, infrastructure investments, and government support. Countries like India are experiencing significant expansion in chemical production due to a growing industrial base, robust manufacturing capabilities, and increased consumer demand.

Despite challenges such as energy price fluctuations and uneven demand in major markets, chemical production is expected to stabilize, supported by economic recovery in regions like Europe and the U.S. Inventory reductions that impacted various industries in 2024 are anticipated to ease, further bolstering production in key chemical segments.

Technological advancements, including AI and automation, will continue to play a critical role in optimizing production processes, minimizing human error, and ensuring compliance with evolving environmental regulations. Green chemistry and other sustainable practices will gain prominence as companies address global sustainability goals.

The Asia-Pacific region remains a key driver, benefiting from its manufacturing capabilities, access to raw materials, and affordable labor. The region’s high urbanization rates and growing demand for consumer goods are expected to sustain its leadership in chemical production and consumption through 2025.

For more details, access the full report at MarketsandMarkets.