Chemical Distributors NAICS 4246

Jul 20, 2025 - Mixed Outlook for Chemicals

• In a June webinar hosted by Chemical Processing, the American Chemistry Council’s (ACC) Chief Economist Martha Gilchrist Moore noted that the US chemical industry – and broader US and global economies – are in a state of confusion. With the US economy cooling amid ongoing trade uncertainty, demand for basic and specialty chemicals is mixed. Basic chemical volumes are projected to decline 0.4% in 2025 before recovering slightly to 0.2% growth in 2026, according to the ACC’s Situation & Outlook report for June 2025, with basic chemicals facing declines in inorganics and synthetic materials, with slight organic chemical improvements. Meanwhile, demand for specialty chemicals – end users of basic chemicals – is expected to remain essentially flat this year and next. With the US chemical industry exporting 25% of its output, trade disputes and the threat of reciprocal tariffs are a concern for manufacturers.
• US chemical manufacturers saw new orders, production, and capacity utilization increase in the first quarter, according to the American Chemistry Council’s latest Chemical Manufacturing Economic Sentiment Index (ESI). The index – which tracks chemical companies’ assessment of their sales, production, and output — posted gains in Q1 despite weak customer demand in major markets and economic headwinds at home and abroad. But rising operating costs led chemical manufacturers to curtail capital spending in Q1 following a year and a half of growth. In contrast to positive first quarter sentiment, more than two-thirds of manufacturers polled were less optimistic about the next six months, citing rising costs for raw materials, energy, transportation and labor, according to ACC.

• EPA action to streamline the chemical review process could help bring new chemicals to market faster, Chemical Processing reports. The permitting process for new chemicals would accelerate with the repeal of a Biden-era amendment to the Toxic Substances Control Act (TSCA) that placed stricter requirements on the new chemicals review process. As part of the Trump administration’s deregulation efforts, the EPA has announced plans to reconsider the regulation governing the review of chemicals already in commerce. Also, the Biden-era amendment to the TSCA has come under fire by the industry and republican lawmakers who say it places unnecessary burdens on chemical manufacturers and refiners by slowing the permitting process and inhibiting the availability of chemicals. The EPA’s move to streamline chemical reviews came just days after the agency issued new guidance directing that any spending exceeding $50,000 requires approval from the Elon Musk-led Department of Government Efficiency.
• Producer prices for chemicals and allied products merchant wholesalers rose 6.9% in May compared to a year ago after posting a 5.2% decline for the previous May-versus-May annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices, which peaked in 2022, are beginning to rebound from low demand as the industry destocked from record high inventory levels. In April, employment by chemical distributors remained relatively flat (down 0.9% year over year), while average industry wages fell 3.4% over the same period to $33.56 per hour, BLS data show. Still, average wages at chemical distributors are at historically high levels.