The recovery momentum for the chemical industry is expected to continue this year, backed by a strengthening U.S. economy, strength in the automotive space, healthy demand in emerging geographies and gradually convalescing construction markets.

Despite facing global headwinds, American chemistry expanded at a healthy 2.0 percent growth rate in 2014, and is expected to reach a 3.7 percent gain in output in 2015, before hitting 3.9 percent in 2016, according to the Year End 2014 Chemical Industry Situation and Outlook, published by the American Chemistry Council (ACC). The report's consensus is that U.S. chemical output will continue to expand well into the second half of the decade, exceeding that of the overall U.S. economy.

After battling strong headwinds in 2013, chemical stocks have begun to bounce back this year driven in large part by the surging shale energy boom and a booming North American market. While any downturn in the economy could weigh on this cyclical sector, market dynamics and management strategies look poised to reward investors with performance gains and respectable dividend yields.