HOUSTON (ICIS)--US manufacturing and export growth will continue to drive demand for basic and specialty chemicals, even as major economies slow and the “synchronised global upswing” unravels, the US American Chemistry Council (ACC) said on Wednesday.
“Expansion across a broad band of industrial sectors is supporting American economic growth this year,” said Kevin Swift, chief economist at the ACC and co-author of the trade group’s “Year-End 2018 Chemical Industry Situation and Outlook.”
“In 2019, industrial activity will expand, but the slowdown overseas is likely to affect the US, and rising trade tensions present a risk of economic disruption,” he added.
The following table shows ACC’s estimates for US chemical production growth:
|Total excluding pharmaceuticals||3.1%||3.6%||3.1%|
The US continues to have a cost advantage from abundant energy and feedstock supplies, leading to 333 announced projects valued at $202bn since 2010.
Stronger export markets and higher business investment spending have boosted demand for chemical end-markets. Light vehicle sales remain elevated, while housing activity is improving.
Specialty chemical demand has expanded, with improvements in oilfield chemicals, electronic chemicals, coatings, adhesives, cosmetic chemicals, and flavours and fragrances.
According to the ACC, US chemical industry will have a $39bn trade surplus in 2018, with exports rising by 10% to $143bn and imports rising by 7.8% to $105bn.
With no major trade disruptions, there will be a $69bn trade surplus in chemicals by 2023.
“American chemistry is set for significant growth in output as new production capacity comes online and demand strengthens in key end-use markets,” said Martha Moore, senior director of policy analysis and economics at ACC and co-author of the Outlook.
“Provided that access to export markets remains open to our producers, expanding global demand will be met by shale-advantaged chemistry sourced from the US,” she added.
The US chemical industry is a $526bn business, accounting for more than 10% of all US exports and 12% of the world’s chemicals, the ACC said.
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