Our annual “state-of-the-industry” cover story (“Upward Momentum Builds”) predicts good growth in production at American chemical plants this year. The article’s author, Martha Moore, chief economist of the American Chemistry Council, Washington, D.C., expects a 4.3% rebound in output in 2022, as inventories are rebuilt and demand in end-use markets firms up further — and then ongoing, albeit somewhat lower, production increases from 2023–2025. In addition, she forecasts that American exports of chemicals will reach $182 billion by 2025, and the U.S. will maintain its traditional substantial trade surplus in chemicals over the entire period. Check out that article for far more details, including on the prospects for individual sectors of the industry as well as the outlook for chemical production around the world. Of course, as she rightly cautions, various factors — particularly ones related to the duration and handling of COVID-19 — could upend such predictions.
An additional upbeat prediction, this time for the overall U.S. economy, came out in early December from the National Association for Business Economics (NABE), Washington, D.C. This outlook survey reflects responses from about 50 professional forecasters.
NABE reports the median estimate for real growth in gross domestic product in 2022 is 3.6% year-over-year, up slightly from the estimate in September’s survey, but, as before, flagging a bit in the second half of the year. Quarterly growth forecasts for 2022 generally outpace those given in September: for the first quarter, 4.6% quarter-over-quarter annualized versus 4.2% then; 3.9% in the second quarter compared 3.7%; 3.2% in the third quarter versus 3.1%; and 2.6% in the fourth quarter, the same as predicted in September.
Among other key takeaways: “NABE Outlook Survey panelists have ramped up their expectations for inflation significantly since September,” says Julia Coronado, NABE vice president, and president of MacroPolicy Perspectives.
“Two-thirds of the panel expect wage increases will keep inflation elevated over the next three years,” notes survey chair Yelena Shulyatyeva, a senior economist at Bloomberg. More than half of respondents also cited continued strong demand for goods and services as a driver of inflation.
The panel expects the unemployment rate to decline steadily during 2022, reaching 3.8% in the fourth quarter. However, the panelists split about evenly on whether the labor force participation rate will return to its pre-pandemic (February 2020) level. Fully half of the respondents don’t expect the rate ever to go back to pre-pandemic levels, while almost one quarter didn’t foresee a return to that level until after 2024. Nearly half attributed the decline in the participation rate to increased retirements prompted by the pandemic.
The lingering, perhaps permanent, decline in the labor participation rate will impact the overall employment picture. “Nearly six out of ten panelists anticipate the U.S. economy will reach full employment within a year,” reports Shulyatyeva.
A majority of respondents (58%) expect the supply of goods will begin to normalize in the first half of 2022.
While the full survey is only available to NABE members, a summary of highlights is downloadable from the group’s website.