This report presents the analysis of the economic impact of TSCA section 5 rules on the chemical industry. The industry will be impacted when it introduces new chemicals. Of the six distinguishable consequences for the chemical industry, the most important are the nonquantifiable uncertainty consequences. The more unclear EPA's rationale in making section 5 notice decision, the greater are the uncertainties. There will likely be a short-run drop in the number of new chemicals introduced into commerce as chemical companies shift their innovation activities into 'safe' chemicals. Current data do not allow a quantitative estimate to be made of the rate of chemical introductions, or the extent of the reduction caused by the section 5 notice requirements; and, even if the data were available, it is doubtful that accurate quantitative predictions could be made. Smaller companies will face greater uncertainties and the direct costs will more often be a factor in company decisions. In the long run, this regulation may cause the chemical industry to be composed of a fewer number of larger competitors better able to absorb the direct costs and regulatory uncertainty associated with the requirements.