OUTLOOK 2026

For 2026, the chemical industry outlook projects a period of moderate global growth driven by sustainability initiatives, digital transformation, and strong performance in the Asia-Pacific region, especially in India. However, this growth will be met with persistent challenges, including global economic uncertainty, high energy costs, and complex regulatory environments.

Overall chemical production is forecast to grow annually by about 3% in both 2025 and 2026. Industrial activity is projected to accelerate to 2.0% growth in 2026, after a more modest 2025.

Leading the growth is the Asia-Pacific region which is expected to be a major driver of global expansion. In particular, India is projected to see its chemical production increase by 10.9% in 2026, driven by robust domestic demand and government support. The Asia-Pacific region is also projected to hold over 45% of the global specialty chemicals market share.

The outlook for the U.S. and Europe is more cautious. European executives predict economic recovery no sooner than 2026, with structurally higher energy prices continuing to weaken competitiveness. In the U.S., production volumes are expected to be flat in 2026, with headwinds continuing to constrain industrial output growth

The industry is facing a challenging times. Global trade uncertainties, including tariffs, create a difficult planning environment for businesses and can disrupt established supply chains. High energy and feedstock costs is persistent issue, particularly for European chemical producers, weakening their longterm cost competitiveness against rivals in the U.S. and Asia. Regulatory compliance continues to be a major burden.