More than 9,000 jobs cut in chemicals sector in November

07 December 2012 19:47  [Source: ICIS news]

WASHINGTON (ICIS)--More than 9,000 jobs were vacated in the US chemicals sector in November from October, the Labor Department said on Friday, part of an overall decline last month in manufacturing employment.

In its monthly report on the nation’s workforce, the department said that chemical sector jobs shrank from 800,800 in October to 791,700 in November, a decline of 9,100 workers or slightly more than 1% of the industry’s workforce.

The department’s workforce report does not distinguish between layoffs and retirements.

That downturn essentially wiped out job gains in the chemicals sector seen over the last 12 months, and last month’s workforce count was essentially even with the November 2011 figure of 791,000.

The department did not offer reasons for the downturn in chemical sector jobs, but the National Association of Manufacturers (NAM) said that the net loss of 7,000 jobs in the manufacturing sector could be attributed to slower sales growth nationwide and uncertainties surrounding the so-called fiscal cliff.

The fiscal cliff is the congressionally mandated tax increases and federal spending cuts that kick in on 1 January unless the White House and the Republican-controlled House can work out a deal to ease both categories without adding to the US national debt.

If the fiscal cliff is not amended or otherwise resolved before then, economists say the resulting $800bn (€616bn) that will be sucked out of the nation’s economy likely would trigger a new recession in the first half of next year.

Because of uncertainty about the looming fiscal cliff and what tax increases they may be facing in the new year, many US manufacturers and other businesses have been reluctant in recent months to make capital investments, buy equipment or take on new workers.

“There has been a substantial deterioration in the percentage of manufacturers who say that their company’s business outlook is positive,” NAM said. 

The trade group said that its survey of manufacturers found that “average expectations for capital spending and hiring over the next 12 months have turned negative for the first time since 2009”, when the US was still in recession.

In addition to the 9,100 job reductions in the chemicals sector, the department said there were 12,000 job losses in food manufacturing and 3,700 employee cuts in computer production.  But some of those losses were offset by 9,700 new hires in the auto industry last month, the data show.

In the plastics industry, about 160 new jobs were added in November, raising the sector’s workforce to 651,400, according to the department.

The downturn in chemicals employment probably will be short-lived, however.

The new surge in low-cost shale gas feedstock availability and related plans by multiple producers to build new chemical plants or expand existing facilities are expected to bring a parallel boom in hiring, according to industry officials.

($1 = €0.77)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

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