Total output for the global chemical industry is expected to grow by 4.8% in 2011, 5.3% in 2012, and 4.7% in 2013, according to forecasts in the mid-year economic report from the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com).
In the report, which was released June 30, ACC remarks that output of chemicals in emerging markets will exceed that of developed countries and strong gains are expected in China, India, and other emerging markets in the Asiaâ€Pacific region. Africa and the Middle East will also experience strong growth, as will Latin America.
“From a product standpoint, we’ll see the strongest growth in the cyclically sensitive sectors, such as petrochemicals and organic derivatives, plastic resins, synthetic rubber and manâ€made fibers as well as specialty chemicals and consumer chemistry,” the ACC report says. Also, “rising incomes and demographic factors (i.e. aging populations) will shift growth toward pharmaceuticals,” the report says.
Longâ€term growth in the global chemical industry is expected to average 4.1% per year, forecasts the report, a pace that will likely exceed that of the overall global economy. Other trends expected are strong gains in capital spending during the next several years, which will result in the need to add capacity. Capital spending in the global chemical industry will reach $548 billion in 2011 and will steadily rise to over one trillion dollars by 2016, the report says.
In 4th quarter of 2010, the U.S. gross domestic product (GDP) surpassed its preâ€recession peak, but growth slowed in the 1st quarter of 2011, with higher imports and weak consumer spending. “Business investment and exports have led the recovery thus far,” the ACC report says, however, “recent indicators suggest that the robust manufacturing recovery has lost momentum.” For example, the report points out that of the nearly 8.8 million jobs lost during the recession, less than a quarter have been recovered.
As a result of persistent high unemployment, high consumer debt and depressed housing levels, there remains concern about the potential for another global recession as higher energy prices choke off the expansion, ACC says. ACC estimates the possibility of a relapse into recession is about 25%.
The consensus forecast for U.S. GDP is for continued growth, by 2.5% in 2011 and 2.9% in 2012, according to the ACC assessment. Also, a rebound of activity from the current “soft patch” is expected in the second half of 2011. “The recovery, however, is fragile; multiple risks re†main and the wrong trade, tax or other policy initiatives could derail activity,” the report says.