WASHINGTON, Dec. 16, 2015 /PRNewswire-USNewswire/ -- The business of American chemistry expanded 3.6 percent in 2015 despite global headwinds that included a strong appreciation of the U.S. dollar and a weakness in several key global markets.
"The U.S. chemical industry renaissance is just getting started," said Kevin Swift, chief economist of the American Chemistry Council (ACC) and lead author of the trade group's "Year-End 2015 Chemical Industry Situation and Outlook," published today. "The fundamentals are strong," he added. "Key domestic end-use markets expanded, consumer spending accelerated, the job market began to firm, and households enjoyed extra savings from lower energy costs."
Swift pointed to light vehicle sales, up 5 percent in 2015, and housing starts, up 12 percent in 2015, as two large, end-use markets that enjoyed banner years. Each light vehicle contains approximately $3,500 worth of chemistry, and each new home approximately $15,000 worth of chemistry products.
The annual publication forecasts a 2.9 percent increase in domestic chemical production in 2016, followed by a 4.4 percent expansion in 2017. During the second half of the decade, U.S. chemistry production is expected to expand at a pace of over 4 percent per year on average, outpacing that of the overall U.S. economy.
According to Swift, the momentum will continue as new capacity comes online in the next several years. As of December 15, 2015, more than 261 new chemical production projects had been announced since 2010 with a total value of more than $158 billion, and a full 34 percent already complete or under construction. "The United States is still the place for chemical companies to invest," said Swift.
On a macroeconomic level, the global economy faltered in 2015 with geopolitical uncertainty and recessions in Brazil, Russia, Japan and other nations, as well as a pronounced slowdown in China. The economies of the United Kingdom and the Euro area advanced, as did that of the United States. U.S. GDP growth is expected to be in line with the underlying trend, about 2.6 percent. Growth is expected to moderate toward the end of the decade. For the business of chemistry, after a promising start top the year, it is likely that overall global production only advanced 2.8 percent in 2015, slightly lower than the 3.0 percent pace in 2014. Prospects will improve in 2016, with global output rising 3.3 percent, then gaining some momentum and hitting 3.7 percent in 2017. In the long-term, the most dynamic growth will be seen in the developing nations of Asia-Pacific and Africa and the Middle East. According to Swift, competitive advantages from shale gas will keep U.S. production strong as well, while these same issues, along with structural challenges, will cause Western Europe and Japan to lag helping the U.S. recapture global market share.
The business of chemistry is an $801 billion enterprise and one of America's most significant manufacturing industries, accounting for more than 14 percent of all U.S. exports and 15 percent of the world's chemicals. More than ninety-six percent of all manufactured goods are touched by products of chemistry.
Prepared annually by ACC's Economics and Statistics Department, the "Year-End 2015 Chemical Industry Situation and Outlook" is the association's annual review of the U.S. and global business of chemistry. It offers global and domestic chemical industry data related to production, trade, shipments, capacity utilization, R&D spending, capital spending, employment and wages.
The "Year-End 2015 Chemical Industry Situation and Outlook" is available as part of a larger subscription. To order the subscription, visit http://store.americanchemistry.com/
SOURCE American Chemistry Council