Last Updated Thursday, October 23 2014
Print

U.S. Chemical Industry Poised For Expansion



Published December 17, 2013
Related Searches: resins
Favorable oil-to-gas price ratios driven by the production of natural gas from shale continue to drive a renewed U.S. competitiveness that is boosting exports, and driving greater domestic investment, economic growth and job creation within the business of chemistry, according to the Year End 2013 Chemical Industry Situation and Outlook, published last week by the American Chemistry Council (ACC).

Likewise, supported by activity within the domestic chemicals sector, the U.S. economy is likely to see continued, though moderated, growth in 2014, according to ACC's monthly Chemical Activity Barometer (CAB). The Chemical Activity Barometer is an established leading economic indicator, shown to lead U.S. business cycles by an average of eight months at cycle peaks, and four months at cycle troughs. The barometer ticked up to 93.9, a 0.1% increase over November on a three-month moving average (3MMA) basis. This marks the eighth consecutive monthly gain for the CAB, which remains up 2.8% over a year ago.

"American chemistry is back in the game," said Dr. Kevin Swift, ACC's chief economist. "After a decade of lost competitiveness, American chemistry is reemerging as a growth industry. We're seeing growing end-use markets; strengthening employment; surging exports; and an influx of tremendous capital investment. Put simply, the U.S. is now the most attractive place in the world to invest in chemical manufacturing," he added.

Swift pointed to several key points to illustrate the turnaround in the industry:
• Over the next five years production is expected to grow by almost 25%, pushing industry shipments to $1 trillion by 2018.
• For the first time since 1999, the U.S. chemical industry is seeing job growth.
• Shale gas and the surge in natural gas liquids supply has helped move the U.S. from being a high-cost producer of key petrochemicals and resins to among the lowest cost producers globally. As a result, exports are surging. The industry has gone from a chemicals trade deficit to a surplus, this year expected to be about $2.8 billion, and by 2018 reaching nearly $30 billion, from almost $300 billion in total exports;
• Capital investment is exploding. Beginning in 2010, as chemical manufacturers began recovering from the Great Recession there has been double digit growth in capital spending – including equipment upgrades and efficiency investments. Over the next five years the U.S. is likely to see more than $60 billion in domestic investment.


blog comments powered by Disqus