U.S. chemical manufacturers have faced a second consecutive quarter of declining activity, including sales and production, alongside weakening demand in major customer markets. This somber outlook is reflected in the latest findings of the Chemical Manufacturing Economic Sentiment Index (ESI) by the American Chemistry Council (ACC). The ESI not only highlights the industry's current situation but also suggests a growing pessimism regarding the economy and regulatory conditions, according to ACC’s assessment.
The survey noted that in the second quarter, chemical manufacturers saw almost stagnant new orders growth, reduced production levels and dwindling inventories for raw materials and finished goods. Input costs, energy and transportation expenses continued to decrease, while labor costs rose. The survey also revealed a significant rise in regulatory burden on domestic chemical manufacturing, with the Q2 ESI reading indicating ongoing and escalating pressure. This increased regulatory challenge could hinder growth and competitiveness, according to the ACC. The ESI, a quarterly index, offers insight into the chemical industry's perspective on business activities, market demand and economic conditions, with a focus on various key components such as production, costs, labor and regulatory burdens.