Economic sentiment for U.S. chemical manufacturers hit a rough patch in Q3 2025, as companies grappled with softening demand and economic headwinds, according to the American Chemistry Council’s (ACC) latest Chemical Manufacturing Economic Sentiment Index (ESI). But despite the downturn, there’s a flicker of optimism as companies look ahead to Q4 and early 2026.
ACC’s index, based on companies’ assessment of their activity level overall (e.g., sales, production, output) fell into negative territory in Q3, as chemical manufacturers reported lower demand in major customer markets and worsened economic conditions in the U.S. and abroad.
“Chemical manufacturing activity contracted in Q3 on the both fronts - domestic and foreign, with declines in production, capacity utilization, and new orders,” said Diego Saltes, ACC’s Director of Economics and Data Analytics. “Momentum shifted after a stronger Q2, and employment continued to slide. Economic concerns remain high for many companies.”
“Chemical manufacturers reduced capital spending in Q3, while costs for materials, energy, transportation, and labor continued to increase. Raw material and finished goods inventories tumbled as companies accelerated destocking,” Saltes added.
“Despite the challenges, production expectations for the next six months improved compared to Q2,” Saltes concluded.