Chemicals production output will rise by 1.6% in 2010
American Chemistry Council also expects 2.2% growth in 2011
Tom Stundza -- Purchasing, 6/24/2009 12:51:45 PM
For 2008 as a whole, overall chemistry output in the U.S. slipped
4.7% and Thomas Kevin Swift, chief economist of the American Chemistry Council,
now expects chemicals production to fall 8.1% in 2009 before recovering 1.6%
growth in 2010 and 2.2% in 2011.
The U.S. chemical industry has experienced the worst decline since the 1980s, says Swift, but the decline has moderated. In May, American chemistry output was off by 9.5% year-over-year and capacity utilization rates dipped to 69.5% from 76.6% a year ago. Excluding pharmaceuticals, chemicals output was off 15.5% year-over-year. Along the supply chain, inventories-to-sales ratios for chemicals have improved over the past few months, but remain historically high, say Swift. Still, "it appears that the massive destocking of 2008 and into the first quarter of 2009 is dissipating."
Excluding pharmaceuticals, chemicals output is expected to fall 11.6% this year before beginning a slow recovery, Swift forecasts. He believes basic chemicals and some specialty segments are expected to face the most volatile variation as the inventory cycle plays out. "Chemicals production will fall in all regions in 2009 with a double-digit decline expected in the Gulf Coast region," he adds, since a weak global economy "will retard U.S. exports and recovery--as will slow growing domestic final demand."
The chief economist says the global chemical industry appears to be recovering led by the emerging Asian economies. "Global chemical output is expected to slip 6.3% in 2009 before recovering in 2010 and 2011," Swift says. "Growth in developing economies will outpace that in developed countries which saw steeper output declines."
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