Global Chemicals Production Set for 3.5% Growth in 2026 — But Who's Actually Capturing It?

Global chemical production is expected to grow in 2026, but the headline growth rate does not tell the full story. Earlier industry forecasts pointed to 3.5% growth, while more recent estimates have been revised lower amid weak demand, geopolitical disruption and persistent overcapacity. Deloitte, for example, now expects global chemical production growth of about 2% in 2026, showing how quickly the outlook has changed.

Asia Remains the Main Growth Engine

The strongest production gains continue to be concentrated in Asia, particularly China. BASF's latest industry data shows that chemical production in Asia increased 5.5% in 2025, while China's chemical production grew 7.0%. China now accounts for roughly half of global chemical production, giving its expansion an outsized impact on global supply, pricing and trade flows.

The Gulf Has a Different Advantage

The Middle East is also positioned to capture growth, particularly in petrochemicals, because producers benefit from relatively competitive feedstock costs and large integrated facilities. The region's expansion is increasingly focused on moving beyond basic feedstocks into higher-value chemicals and polymers. Industry analysis describes rapid production expansion in the Middle East alongside China's capacity buildout, putting additional pressure on older and higher-cost producers elsewhere.

Europe Is Moving in the Opposite Direction

Europe is the clearest contrast to the growth story. BASF forecasts EU chemical production to decline 0.6% in 2026, while Cefic reported that EU27 chemical production fell 3.2% year over year in Q1 2026. High energy costs, weak industrial demand, import pressure and global competition continue to undermine European competitiveness.

North America Is Also Facing Pressure

The United States is not capturing the global growth evenly either. BASF expects US chemical production to decline 1.0% in 2026, citing weak demand from industries such as automotive, construction and consumer goods. Meanwhile, S&P Global's 2026 outlook points to continued oversupply and capacity adjustments in North America.

Where the Growth Is Actually Going

The emerging picture is therefore less about a uniform global recovery and more about regional redistribution of chemical production. Asia, led by China, remains the dominant volume-growth center, while the Middle East benefits from feedstock advantages and new integrated capacity. Europe is cutting or restructuring capacity, while North America faces its own oversupply challenges. For chemical companies, the critical question is no longer simply whether global production is growing, but which regions have the cost position and demand base to capture that growth profitably.