Industry Profile: Chemical Industry in Perspective
Manufacturing output has been on the rebound in recent months, and the American Chemistry Council (ACC) reports that demand for chemicals is holding its own. The council says that its benchmark Chemical Production Regional Index was flat in June, after a pair of 0.1% gains in April and May.
By the numbers
Nationwide, the Chemical industry accounts for $770 billion in annual revenue and supports nearly 25% of domestic GDP. At $188 billion in exports last year, the chemical industry represented 12% of all outbound U.S. shipments, making it the second-largest exporting sector. It draws $57 billion in investment, and each job in the industry creates 7.5 positions elsewhere in the economy—for a total of 6 million jobs.
The manufacturing sector is a primary driver for chemical end-user products. In particular, increased output in the auto industry is helping to grow sales of materials farther up the supply chain: rubber products, machinery, and plastics products in particular.
Here in Pennsylvania, Moody’s Analytics indicates that Chemical Industry output (expressed in terms of Gross Product) returned to growth in 2012 and is now well into an upswing that will continue throughout the decade, surpassing $9.4 billion by 2020.
In fact, the chemical industry, which enjoys a great deal of activity in the region, touches as much as 96% of all manufactured goods.
Overall chemical production ticked up 0.5% year-over-year, with gains in adhesives, coatings, consumer products, and synthetic rubber. Other segments, including organic chemicals, pesticides, pharmaceuticals, and plastic resins, declined compared to March output figures.
“As a provider of raw materials for a host of industrial activities, the chemical industry will follow economic growth in 2013,” said Sylvia Wower, DVIRC’s Lead Researcher. “That said, the industry is experiencing structural changes. The abundance of natural gas is providing cheap feedstock for both the chemical and plastics industries, and we are seeing the benefits here in the region. Just last week Dow Chemical announced the movement of 800 jobs to a facility in Collegeville, Montgomery County. These are high-paying, skilled jobs that could very easily have left for another area or gone overseas. Instead, they are staying here in southeastern Pennsylvania.”
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