Economics

Report Details Chemical Industry’s Contribution To Global Economy

By Chemical Processing Staff

Mar 13, 2019

In conjunction with the beginning of the Fourth United Nations Environment Assembly (UNEA-4), the International Council of Chemical Associations (ICCA) releases an analysis of the chemical industry’s contributions to the global economy: The Global Chemical Industry: Catalyzing Growth and Addressing Our World’s Sustainability Challenges. According to the report, the chemical industry touches nearly every good-producing sector, making an estimated $5.7 trillion contribution to world Gross Domestic Product (GDP) through direct, indirect and induced impacts, equivalent to seven percent of the world’s GDP, and supporting 120 million jobs worldwide.

“The innovations developed and produced by the chemical industry’s longstanding presence worldwide have helped turn the tide of human history. Over time, chemical manufacturers have become an integral part of the global economy and a critical enabler of technologies that improve people’s lives around the globe,” says Cal Dooley, ICCA council secretary and president and CEO of the American Chemistry Council (ACC). “This report makes clear that the chemical industry is an irreplaceable contributor to global GDP, a source of skilled employment opportunities and a major enabler of progress in the environmental, social and economic aspects of sustainable development as reflected in the United Nation’s Sustainable Development Goals.” 

Key findings of the report include:

  • Directly, the chemical industry added $1.1 trillion to world GDP and employed 15 million people, making it the fifth-largest global manufacturing sector.
  • For every $1 USD generated by the chemical industry, a further $4.20 USD is generated elsewhere in the global economy.
  • Companies in the chemical industry spent an estimated $3 trillion USD with their suppliers in 2017, buying goods and services used in the manufacture of their products. This supply chain spending contributed an estimated $2.6 trillion USD to global GDP, and supported 60 million jobs.
  • The global chemical industry invested an estimated $51 billion USD in Research and Development (R&D), supporting 1.7 million jobs and $92 billion USD in economic activity.
  • The largest contributor to GDP and jobs is the Asia-Pacific chemical industry, generating 45% of the industry’s total annual economic value, and 69% of all jobs supported. Europe made the next most important contribution ($1.3 trillion USD total GDP contribution, 19 million jobs supported) followed by North America ($866 billion USD total GDP contribution, 6 million jobs supported).

“This new analysis underscores the essential role that the chemical industry plays in driving economic growth and creating opportunity for millions of people around the world, but the chemical industry’s impact goes beyond economic value,” says Marco Mensink, director general, European Chemical Industry (CEFIC). “Working in partnership with United Nations Environment through the Strategic Approach to Chemicals Management (SAICM), we are deeply committed to building capacity to safely manage chemicals through their production, transport, use and disposal, and have held over 230 workshops in 45 countries.”     

ICCA commissioned Oxford Economics to provide a detailed assessment of the chemical industry’s contributions to the global economy. The report aims to examine the full extent of the chemical industry’s economic footprint – whereby production of chemical products supports activity not just in the industry itself (direct impact), but in a wide range of other sectors throughout the supply chain (indirect impact supported through procurement of intermediate goods) and wage-financed effects (payroll-induced impact sustained via consumption spending of workers employed by the industry and its suppliers).

“The products that the chemical industry manufactures change people’s lives by providing clean water and making possible renewable energy sources, advanced medical care, stable and nutritious food supplies, recycling technologies and more,” says Hiroshi Watanabe, director general, Japan Chemical Industry Association (JCIA). “By capturing the economic value of our operations, research and products, we now see the full extent of our industry’s positive impact on society today and the important role we are playing in creating a pathway to a more sustainable future.” 

For more information, visit: www.icca-chem.org