Revenue from the sales of chemicals in the United States is projected to reach $1 trillion by 2018, and research and development spending will rise to $68.7 billion, according to a new report from the American Chemistry Council.
In a year-end report titled "2013 Chemical Industry Situation and Outlook: American Chemistry is Back in the Game," the ACC projects that chemical output in the U.S. will expand 2.5% in 2014 and 3.5% in 2015, after inching forward 0.1% in 2012 and 1.6% this year.
"Following a decade of lost competitiveness, American chemistry is re-emerging as a growth industry," the council states in the report.
The United States is becoming a favorable investment location for chemical producers, largely because of the availability of low-cost feedstock from shale gas. Through early December, an estimated $90 billion in investments for more than 135 new chemical production projects have been announced, the report states.
Exports Boost Resins, Organics
Especially strong growth is projected in the plastic resin and organic chemical segments in 2014 and 2015, both of which will be boosted by recovering export markets.
"Looking ahead to 2014, we anticipate a sustained global expansion that will result in growing trade," ACC Chief Economist T. Kevin Swift writes in the report. "We also anticipate positive supply chain impacts from unconventional oil and gas development in the U.S., through increased demand for equipment, chemicals, and services required for energy production, in addition to lower fuel prices for all consumers."
While the gain in U.S. chemical output for 2013 was a modest 1.6%, overall inventories remain balanced. Therefore next year's anticipated acceleration in demand will necessitate new production, according to the report.
This year's gains were led by consumer chemistry and specialties. However, advances in manufacturing and exports next year will drive demand for basic chemicals, the ACC predicts.