In a report by MarketsandMarkets, the global chemical industry is projected to grow from $6,182 billion in 2024 to $6,324 billion in 2025, reflecting a year-over-year increase of 2.3 percent. The industry enters 2025 with a positive outlook following a year of recovery.

The sector faced multiple challenges in 2023, including unstable energy prices, rising feedstock costs and geopolitical tensions such as the war in Ukraine. These pressures led to marginal production increases. However, in 2024, a recovery trend emerged, supported by lower energy costs and renewed demand from key sectors such as semiconductors and automotive. The American Chemistry Council (ACC) projected a 3.4 percent increase in production in 2024, with similar growth expected in 2025.

Despite continued geopolitical and economic headwinds in 2024, production is forecasted to expand further in 2025, driven by stabilizing economies in Europe and the United States. According to ACC, inventory reductions that slowed growth in prior years are expected to ease, allowing for a rebound in chemical output across various segments. While performance varied across regions and sectors during the first three quarters of 2024, overall sales and production improved. Still, demand remained volatile. In the third quarter, new order volumes declined, primarily due to reduced foreign demand amid global uncertainty.

Asia-Pacific is expected to lead growth in 2025, with strong gains in countries such as India fueled by domestic demand, infrastructure investment and manufacturing expansion. The region benefits from a robust industrial base, urbanization, labor availability and cost-effective production. Demand for chemicals across automotive, construction, electronics and healthcare remains high, while government policy and technological advancement continue to drive growth.

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Access the full report here.