20 May 2013 17:25 [Source: ICIS news]
WASHINGTON (ICIS)--A wave of new chemical sector capital investments will generate more than 500,000 permanent US jobs along with 1.2m short-term construction jobs and $20bn (€15.6bn) in tax revenues, an industry trade group said on Monday.
The American Chemistry Council (ACC) said that it has analysed the broad economic effects of nearly 100 chemical sector capital projects - totalling some $71.7bn in investments - that have been announced since newly abundant natural gas supplies have positioned the US as among the lowest-cost chemical producers worldwide.
“The US has become a magnet for chemical industry investment,” said ACC president Cal Dooley.
He said that the flood of new capital spending is “a testament to the favourable environment created by America’s shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come”.
The report says that 97 chemical sector capital projects announced through the end of March this year likely will generate 46,000 permanent chemical industry jobs by 2020.
Those projects also are expected to stimulate more than 260,000 new jobs in industries that provide materials and services to chemicals producers, the study said.
In addition, according to ACC, that employment growth in the chemicals sector and supplier industries will have a knock-on effect in communities across the country by increasing worker demand for such items as housing, consumer services, food and clothing and transportation.
That demand will in turn stimulate about 225,000 “payroll-induced” jobs in communities where workers spend their wages, the study said.
Finally, the council said that the 97 projects are expected to generate nearly 1.2m in temporary construction jobs as they build out during the next half-dozen years.
Altogether, the capital projects, higher employment and increased manufacturing are likely to generate $20bn in tax revenues for federal, state and local governments, the report said.
Dooley said that the shale-related investments announced so far are particularly noteworthy for the players involved.
“What’s especially exciting is that half of the announced investments are from firms based outside the US,” he said, “which means our country is poised to capture market share from the rest of the world.”
But Dooley cautioned that actual completion of the many planned capital projects could be significantly affected by US government policies.
“Government policies will strongly influence whether the US is able to realise the shale gas opportunity,” he said.
He said that policymakers need to provide access to natural gas resources on government lands, facilitate timely permitting for the new construction and expansion projects, and implement responsible, state-based regulations for natural gas production.
Dooley and other chemicals industry officials have warned that the dozen or more shale gas regulatory initiatives announced by multiple federal agencies could jeopardise the shale boom and related investment plans.
($1 = €0.87)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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