The Atradius October 2025 outlook highlights a downshift in global chemicals growth, driven partly by U.S. trade policy headwinds. Worldwide chemicals production is projected to expand by just 2.1 % in 2025 and slow further to 1.5 % in 2026, reflecting increasing pressure from tariffs, inflated input costs, and shifting trade flows.
Global & Trade Pressures
Because chemicals underpin so many end‑markets, the industry is especially sensitive to downstream weakness. U.S. tariffs are elevating costs in key sectors (notably automotive), leading global buyers to delay capital investment or shift sourcing. Atradius
There is also a risk of Chinese exports—originally destined for the U.S.—being redirected to other markets (especially Europe), intensifying global oversupply and undercutting regional producers.
Regional Highlights
United States: After a robust 3.3 % growth in 2024, U.S. chemical output is estimated to expand only 0.6 % in 2025, and decline ~0.8 % in 2026. Tariffs are weighing heavily on demand in automotive and construction, prompting investment delays. Atradius
Yet a mid‑term rebound is expected: expansionary fiscal policies and resilient consumer demand may reignite demand in 2026 and beyond.
China: Growth is decelerating—5.5 % in 2025 to ~1.3 % in 2026—amid overcapacity and sluggish construction demand. Atradius
To counter margins under strain, the government plans to shut inefficient capacity and shift toward higher value specialty chemicals.
India: A bright spot, India’s chemical sector is forecast to flatten in 2025 but rebound with ~9 % growth in 2026, buoyed by domestic demand, population growth, and favorable investment policy frameworks.
Europe & UK: Flat production in 2025–26 is expected. Persistent high energy prices, tight margins, and Chinese import pressures pose structural challenges. Atradius
Germany is singled out for contraction in both years, especially as its key automotive sector faces export pressure. Atradius
Implications for Businesses
Cost & margin pressures will intensify — firms need to scrutinize efficiency, supply chains, and product differentiation.
Strategic positioning is critical — regional diversification, specialty chemistries, and higher‑value niches will fare better
Risk monitoring is essential — shifts in trade policy or input costs could rapidly alter the outlook
https://atradius.us/knowledge-and-research/reports/industry-trends-chemicals-october-2025?
