10 December 2013 23:01 [Source: ICIS news]
By: Joseph Chang
NEW YORK (ICIS)--The US chemical sector’s exports are poised to soar in the coming years as higher production driven by shale gas comes on line, leading to a record trade surplus of around $30bn (€22bn) by 2018, the chief economist of the American Chemistry Council (ACC) said on Tuesday.
“The US chemical industry may be experiencing its own tipping point. Following a decade of lost competitiveness, the sector is re-emerging as a growth industry,” said Kevin Swift, chief economist of the ACC in an interview with ICIS.
“America is the place to be,” he added.
There are 136 planned chemical projects in the US that have been announced, representing $91bn in capital investment. And 54% of the dollar figure is foreign direct investment (FDI), said Swift.
“By 2018, US capital spending by the chemical industry will reach $61.2bn – more than double the level of spending at the start of this prolonged cycle in 2010,” he said.
The US chemical industry is projected to generate a trade surplus of $2.7bn in 2013 after an $800m surplus in 2012 and a deficit of $3.7bn in 2011, according to the ACC.
Exports are expected to rise from $192.7bn in 2013, to $279.4bn by 2018.
“We are already starting to see the impact of shale gas and the increased competitiveness it brings,” said Martha Gilchrist Moore, senior director, policy analysis & economics for the ACC.
“The projected $30bn surplus by 2018 is largely a function of petrochemical competitiveness and new investment,” she added.
The momentum has already started but will accelerate starting in 2015 when the first major wave of projects and expansions kick in, said Swift.
US chemical industry employment will finally increase in 2013 – by 1.3% to 793,800 workers - for the first time since 1999, and is projected to increase every year through 2018, said Moore.
The overall macro outlook for 2014 is positive, according to Swift.
“Europe has bottomed out and China is gaining traction while the US industrial cycle is clearly improving,” said Swift.
“Manufacturing in the US is strengthening on higher light vehicle sales and the housing market is improving, although at a slower pace. Overall US chemical inventories are well balanced and the global economic improvement will only help our export situation,” he added.
($1 = 0.73)
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