Overregulating the chemistry industry jeopardizes innovation, jobs, and economic growth. Learn more.

  • Read time: 3 minutes
  • Blog Post

Chemical Producers Express Optimism About Economy While Concerns Continue to Mount Regarding Rising Regulatory Challenges

Scott Jensen

U.S. chemical manufacturers report their company’s activity level overall (e.g., sales, production, output) improved in the first quarter (Q1) of 2024, according to the latest findings from American Chemistry Council’s (ACC) Chemical Manufacturing Economic Sentiment Index (ESI). While chemical manufacturers’ sentiment regarding the state of the global economy remained negative in Q1, their assessment of the U.S. economy improved.

ACC Chemical Manufacturing Economic Sentiment Index Q1 2024

“Concerns about costs and regulations cast a shadow over positive reports from companies that orders have picked up,” said Emily Sanchez Director of Economics & Data Analytics at the ACC. “While there has been some improvement regarding costs, the survey indicates that regulatory pressures continue to be a big worry for companies.”

The Good, The Bad and The Ugly:

  • Demand Picked Up: Following a drop off in Q4 new orders for U.S. chemicals recovered strongly in Q1. In welcome news orders were up for both domestic orders and exports. Over Q1, more than half (57%) of chemical manufacturers reported the volume of new orders had increased. Looking ahead six months, chemical manufacturers anticipate gains in the volume of both domestic and foreign orders. 
  • Production Costs Mixed Bag: Energy costs (for fuel and power) have eased since an uptick in Q3 2023 and the Q1 2024 ESI reading of -9.3 indicated declines overall. Unfortunately, transportation and input/raw materials costs rose over Q1 following declines every quarter in 2023. And labor costs continued to build following gains every quarter in 2023. 
  • Regulatory Concerns Hit New High: In a troubling trend, many manufacturers (58%) reported their regulatory burden grew in Q1 and even more (67%) expect it to rise further in the coming six months. These findings track with an earlier regulatory survey ACC conducted that found the regulatory burden for most companies increased across all levels of government, which has hurt their ability to support national priorities and expand production.

Companies said they expect both the U.S. and global economy to improve over the coming six months. And chemical manufacturers expect demand to strengthen and their own company’s activity levels to accelerate over the first half of this year.

The ESI provides quarterly insights from chemical companies engaged in nearly every aspect of the manufacturing sector and the U.S. economy. This latest report builds on over five quarters of data from Q1 2023 to Q1 2024 and marks a shift in how companies feel about the economy.

“For the first time since we started conducting the survey companies are signaling optimism about economic conditions,” said Sanchez. “That’s probably because there has been a significant shift toward improved customer demand and increased production output. Addressing the cost and regulatory challenges will be key to sustaining this optimism and positive trend.”  

View the complete findings

American Chemistry Council

The American Chemistry Council’s mission is to advocate for the people, policy, and products of chemistry that make the United States the global leader in innovation and manufacturing. To achieve this, we: Champion science-based policy solutions across all levels of government; Drive continuous performance improvement to protect employees and communities through Responsible Care®; Foster the development of sustainability practices throughout ACC member companies; and Communicate authentically with communities about challenges and solutions for a safer, healthier and more sustainable way of life. Our vision is a world made better by chemistry, where people live happier, healthier, and more prosperous lives, safely and sustainably—for generations to come.

We use cookies to personalize content and ads, to provide social media features, and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.

Privacy Policy - Terms & Conditions