18 February 2009 00:10 [Source: ICIS news]
WASHINGTON (ICIS news)--US chemical sector and plastics industry officials on Tuesday welcomed the $787bn (€614bn) stimulus package signed by President Barack Obama, saying it will drive demand and ease financing issues.
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The spending measure - officially titled the American Recovery and Reinvestment Act - was passed by Congress late last week and welcomed earlier on Tuesday by the construction industry.
Seeming to borrow from the wartime idiom of the late Winston Churchill, Obama said the stimulus measure “does not mark the end of our economic troubles”.
“Nor does it constitute all of what we must do to turn our economy around,” he said, “but it does mark the beginning of the end.”
The American Chemistry Council (ACC) said it also is “pleased that the stimulus package contains energy efficiency and renewable energy investments, both of which help drive demand for chemistry products”.
The council said that energy efficiency spending to come from the package over the next 24 months “will benefit producers of insulation, weather stripping, sealants, vinyl replacement windows and doors, chemistry in appliances, chemistry in programmable thermostats, etc”.
The ACC also noted that the chemicals sector will benefit from stimulus spending on renewable energy projects.
“Some windmill blade designs are chemistry-intensive,” the council said, noting too that solar panels, lithium-ion batteries and photovoltaics also consume chemicals in production processes and as end-product components.
The Society of the Plastics Industry (SPI) hailed tax cut provisions in the stimulus measure.
“We see potential in the plan’s enhanced expensing and depreciation provisions, which allow our members’ customers to write off purchases more quickly,” said William Carteaux, SPI chief executive.
“The plan also expands net operating loss ‘carryback’ which essentially permits our smaller members to recoup certain taxes paid in previous years,” Carteaux said. “This will add liquidity for smaller firms in the near term, and we are hopeful that future legislation will broaden this provision so that firms of all sizes can benefit.”
Also important, said Carteaux, “are aspects of the plan that bolster key plastics consuming industries such as construction and automotive”.
In addition to some $135bn in spending for infrastructure and commercial projects, the stimulus measure includes an $8,000 tax credit for first-time home buyers that is intended to help revive the US home construction industry, a crucial downstream consuming sector for chemicals and plastics.
($1 = €0.78)
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