Chemical industry outlook: recent headwinds amid slower growth
According to the situation and outlook of the chemical industry at the end of 2019 of the chemical Council of the United States (ACC), due to the trade challenges and the slowdown in the growth of several key chemical end use markets, the expansion of chemical production in the United States will slow down in 2019. The weakness of global manufacturing industry and uncertainty of trade policy will further slow down the growth of us chemical production in 2020. On the other hand, new capacity related to shale gas advantages will help.
Kevin swift, chief economist of ACC and co-author of outlook, said: "exports of chemicals and some products containing chemicals have declined this year due to slower growth prospects in most parts of the world and increased trade tensions." Total U.S. chemical trade is expected to decrease by 3% to $242 billion in 2019, and then recover by 1% in 2020. Exports will fall by 2.5% to $137 billion in 2019 and increase by 1.1% to $138 billion in 2020. In 2019, US chemical imports will drop by 3.9% to US $105 billion.
In 2019, industrial output slowed down sharply to 0.9% growth, because trade tensions interrupted the supply chain, energy investment slowed down, and the growth of major trading partner economies slowed down, which had a negative impact on US export demand. Industrial output is expected to decelerate further in 2020 and then strengthen in 2021, growing by 0.5% and 1.4% respectively. By 2020, the growth of key end use industries will be mixed, with the largest growth in building materials, oil and gas exploration, oil refining, semiconductor and aerospace.
Due to the abundant supply and low price of energy and raw materials, American chemical manufacturing industry has a competitive advantage in the global market. Since 2010, the industry has announced 340 projects with a cumulative value of $204 billion. In 2019, the total output of chemical industry (excluding pharmaceuticals) will increase by 0.6%, and it is expected to increase by 0.4% in 2020 and 2.3% in 2021. The output of basic chemicals is expected to grow by 0.7% in 2020 and 3.1% in 2021.
"The U.S. chemical industry is expanding with the start of shale advantage investment and the planned increase in production capacity," said Martha Moore, senior director of policy analysis and economics at ACC and co-author of outlook This is the seventh year in a row that the industry has added high paying jobs to Americans. Continuing its tradition of innovation, the company remains committed to providing the necessary materials for a growing population and to finding sustainable solutions for the future. "
Automotive, construction and construction are key end use markets for chemistry. Compared with the strong growth in 2015-18, the output of light vehicles in the United States has slowed down. It is estimated that the sales volume will fall to 16.9 million in 2019 and 16.5 million in 2020. The number of new housing starts will rise slightly to 1.26 million in 2019, and will remain stable in 2020.
The special chemicals industry continued to grow steadily this year. Many professional segments start to decline at the end of 2019 and are expected to grow by 2.6% this year. With the further slowdown of the end use market demand and the decline of energy investment in 2020, the production of special chemicals is expected to decline slightly by 0.4%. As the industrial sector recovers in 2021 and beyond, the growth of specialty products is likely to recover.
US GDP is expected to grow by 2.3% in 2019, down from 2.9% in 2018. Trade related uncertainty and the decline in business investment were only partially offset by favorable consumer spending. It is expected that the growth rate will drop to 1.8% in 2020, and the growth rate in 2021 will be lower than the trend level. The long-term growth of the US economy is expected to be even more sluggish. With the recovery of customer industry and the maintenance of raw material advantage, the American chemical industry will be a positive contributor.
The chemical industry is an enterprise with a value of 553 billion US dollars. It is one of the most important manufacturing industries in the United States, accounting for more than 10% of the total exports of the United States and 14% of the world's chemical products. More than 96% of finished products are in contact with chemical products.
The situation and Prospect of chemical industry at the end of 2019, compiled annually by the economic and statistical department of ACC, is a review of chemical business and macro economy in the United States and the world. It provides global and domestic chemical industry data, including production, trade, shipment, capacity utilization, end use markets, R & D expenditure, capital expenditure, employment and wages.
