Cheap natural gas from North American shale developments and growth in Latin American markets likely helped U.S. chemical makers offset weak first-quarter demand from Europe, which is struggling with a sovereign debt crisis and high unemployment.

Dow Chemical, Dupont and others in the sector produce many of the building blocks for clothing, construction materials, food and thousands of other items. The industry's results are often a key barometer of broader economic trends.

There are concerns about Europe, especially the continent's southern countries, where many are out of work, but rebounding U.S. chemical production will be the industry's first-quarter headline story, analysts said.

"While people will certainly talk about concerns associated with Europe, I think strength in the U.S. will far outstrip any Europe-related weakness," said Hassan Ahmed, a chemical industry analyst with Alembic Global Advisors.

Many U.S. chemical makers were able to raise prices, boosting their margins as supply costs dropped, Ahmed said.

The Dow Jones U.S. Chemical index rose 15.6% during the first quarter, a jump mirrored by Dupont shares. Dow Chemical rose 20%, and Huntsman gained 40%.

In North America, cheap natural gas from shale developments is boosting the chemical industry by bringing down costs. Natural gas can be used to make ethylene, itself the building block of many common chemicals.

Dow Chemical Chief Executive Officer Andrew Liveris has called shale gas a "game changer." The company is building new plants on the U.S. Gulf Coast to process ethylene.

Last month Royal Dutch Shell said it would put a $2 billion chemical plant in Pennsylvania to be near large shale gas reserves in that state.

In another positive sign for the U.S. economy, rail car shipments of chemicals rose 5% in the first quarter from a year earlier, according to the American Association of Railroads.

First-quarter results are also likely to reflect strong sales of pesticides, herbicides and other chemicals used for the planting season in the Northern Hemisphere. In the United States alone, government officials expect the largest corn crop in history.

Monsanto, which makes genetically modified seeds that compete with products from Dow and Dupont, posted a 19% jump in quarterly income earlier this month.

Europe's weakness will still show up in the earnings reports. Dow and LyondellBasell's deep European exposure could offset strength in the United States, Wells Fargo analyst Frank Mitsch said in a note to clients.

Dow blamed "very poor market conditions and unfavorable economic outlooks" when it closed Styrofoam insulation plants in Hungary and Portugal earlier this month.

PPG Industries laid off 2,000 workers earlier this month, most of them in Europe. While business conditions during the first quarter were "strong" in North America and "solid" in Asia, they were "muted" in Europe, PPG CEO Charles Bunch said.

For chemical makers, concern about Europe has led to conservative earnings estimates and high short interest, the percentage of a company's stock held by investors who expect it to fall.

Dow reports its results on April 25. Analysts on average expect earnings of 58 cents per share, according to Thomson Reuters I/B/E/S, down slightly from 60 cents a year earlier.

Short interest in Dow was nearly 3% in the first quarter, the highest it has been since the fall of 2010.

Wall Street expects Dupont to earn $1.55 per share, compared with $1.50 a year earlier, when strong sales of seeds and solar panel films helped it trounce expectations. The company will report its results on Thursday.

In Brazil, sales of Dupont's bulletproof car kit -- made with the company's Kevlar -- jumped 70% in the first quarter from a year earlier, company officials told Reuters.

Huntsman's earnings are expected to fall to 40 cents per share from 47 cents, although CEO Peter Huntsman said during the first quarter that he was seeing a "resurgence in orders" from the fourth quarter.

"If that is restocking, if it is people pre-buying ahead of our price increases, or if it is a genuine economic uplift, I don't know," Huntsman said.

The company will report its results on May 1.