Issue Date: July 6, 2009
Facts & Figures Of The Chemical Industry
It will be a long time before the world's chemical company employees forget the roller-coaster ride that was 2008. The industry had a promising start, but it couldn't avoid the economic devastation that spread to almost every corner of the globe. Indeed, many of the total figures for 2008 recorded in Facts & Figures do not yet reflect the full force of the current recession.
The year started on a high note. Strong demand for the industry's products, especially in emerging markets, made up for rising energy costs. By the end of the first quarter, however, flat sales volumes and concerns about the effects of the emerging financial crisis suggested tough times ahead.
The economic slowdown was first evident in Europe, where many chemical firms reported stalled growth in their first-quarter earnings. In the U.S., lower earnings began to appear in the second quarter, as companies continued the race to raise prices to reflect their costs.
For U.S. chemical makers, the story changed dramatically in September, when Hurricanes Gustav and Ike blew in to the Gulf Coast, shutting down production for months. It wasn't long before the natural disaster of the third quarter was outdone by the man-made economic collapse.
In the fall and winter of 2008, the economic downturn made companies allergic to inventory, and chemical production dropped significantly. But the forces of globalization did not slow, and international trade for the year actually increased.
Even so, the chemical industry continued to plan for a brighter future last year, increasing both capital and R&D spending compared with 2007. But many of the effects of the recession on company spending and employment will likely appear in 2009; firms released a flurry of cost-cutting announcements in December and January.
- Chemical & Engineering News
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