ACC Report: Economic Outlook For U.S. Chemistry Industry Improving
The outlook for the U.S. chemicals manufacturing sector is improving gradually and global production is set to increase in the coming year, thanks in part to dramatic growth in export markets for the products of chemistry, according to the 2010 Year-End Situation and Outlook, a report released today by the American Chemistry Council (ACC).
For 2010, U.S. chemistry exports will be up by 17%, shifting the trade balance for the industry from a $0.1 billion deficit to a $3.7 billion surplus, its best performance in 10 years. The growth in export markets also has partially offset soft domestic demand for the products of chemistry.
“To maintain this momentum, we need sound economic, energy and environmental policies that will encourage the growth of America’s manufacturing sector and foster technological advances while also protecting human health and the environment,”
says ACC President and CEO Cal Dooley.
Domestically, chemical production volumes have increased across all regions of the United States in 2010 following steep declines in 2008 and 2009. The largest gains have occurred in the Gulf Coast and Ohio Valley regions, boosted by export demand for basic chemicals and plastics. Output is expected to grow moderately in all regions in 2011 and continue to improve through 2012.
The $674 billion American chemistry enterprise accounts for more than 10% of U.S. exports and provides approximately 780,000 jobs in the United States.
Growth in export markets is driven by several factors, including favorable energy costs, resulting from developments in extracting natural gas from shale; and growth in emerging markets, where recovery, and now expansion, has been strongest.
“Shale gas extraction has been a ‘game changer’ for America’s chemical manufacturers, enabling us to remain highly competitive in a global market,” Dooley said. “We want to ensure that the appropriate regulatory policies are in place to capitalize on this energy source, while ensuring protection of our water supplies and the environment.”
Growth in emerging markets, most notably in China, India, and Brazil, is increasing demand for chemistry feedstock materials. Production of chemistry products in emerging economies increased by 12.2% in 2010, and further gains are expected. During 2011, as emerging nations continue to present good growth prospects, trade in chemicals will continue to expand.
Despite the recovery, jobs in the U.S. chemistry industry are not expected to increase in the coming year. Since the beginning of the recession, the chemistry industry has lost more than 80,000 jobs, and chemical industry employment will continue to decline slightly as productivity gains outpace production growth. However, average hourly wages for chemistry industry employees rose 4.3% in 2010 and are expected to advance even further in 2011 and 2012.
For more information, visit: http://www.americanchemistry.com.