It reflects a year of cautious growth, regional expansion, and evolving market priorities. According to the US association, a comparison of the survey data for 2025 with that for 2024 shows stable core markets in the industry, with notable shifts in chemistry capacities and operational strategies.

Operating Environment

For North American specialty chemical manufacturers, the past 12 months have been marked by significant economic pressures driven by rising inflation, fluctuating raw material costs, and supply chain disruptions, SOCMA says. These factors have increased production costs and heightened scrutiny over operation efficiency, with companies taking a more conservative approach to capital investments.

The unemployment rate has fluctuated over the last year, with initial declines in the chemical manufacturing sector as demand picked up post-pandemic. With the industry reporting flat or slow business in late 2024, companies retain and offer incentives to skilled workers to improve efficiencies as they prepare to expand into new markets.

While government policy has remained unchanged over the past 3 years, 2024 has brought an unprecedented political landscape into play, leading to an uncertain business and regulatory climate. Many chemical manufacturers have delayed projects and decision-making as they awaited post-election clarity.

According to SOCMA’s survey, market conditions showed early promise in 2024 as destocking trends normalized, but specialty and fine chemical manufacturers experienced flattening demand as the year progressed.

Despite post-pandemic optimism for strengthening North American manufacturing through reshoring initiatives, progress on regional partnerships has been more measured than anticipated.

Future Projections

SOCMA states that capital expenditures (CAPEX) for 2025 focus on growth and maintenance with a conservative approach to new product innovation. Companies are increasingly cautious about onshoring efforts, with economic challenges and regulatory hurdles remaining significant barriers. AI and digitalization are emerging as tools for operational improvement, though most companies are in the early stages of exploring their potential.

The survey also highlights the demand for contract/toll manufacturing partners with specific chemistry and equipment capabilities, including esterification, ethoxylation, hydrogenation, and distillation. This slightly differs from the previous year’s survey, which yielded polymerization, hydrogenation, and distillation as the most in-demand chemistries.

Logistic costs rank relatively low on customers’ priority lists, while challenges like long-term strategy timelines and US regulations complicate reshoring efforts.

Overall, SOCMA’s 2025 survey highlights a stable yet evolving industry landscape, with companies managing risks, expanding growth through increased efficiencies, exploring new markets and adapting to ongoing challenges related to supply chains, regulatory compliance, and technological advancements.

SOCMA's complete 2025 Contract Manufacturing Outlook is available here.