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Job Losses Forecast

Labor Department sees chemical industry employment continuing to decline through 2012

April 12, 2004 | A version of this story appeared in Volume 82, Issue 15

It's well known that employment in the chemical industry has been shrinking. Since 1999, the industry has cut some 65,000 employees, or more than 6.5% of its average annual workforce, as the recession and slow recovery have spurred the industry to cut costs.

But if anyone thinks that an economic recovery will halt the contraction, the the Bureau of Labor Statistics (BLS) has bad news: Total employment in the industry will continue to fall.

According to an analysis of industry employment and output, published in the Labor Department publication Monthly Labor Review, total chemical industry employment will continue to fall, from a 2002 base year, at an average annual rate of 0.4% to 891,000 by 2012. Total U.S. nonagricultural employment will increase at an average annual rate of 1.5%, while overall manufacturing employment will decline at a 0.1% rate.

Of course, the "total" employment data used for chemicals do not really mean total employment. Under the North American Industry Classification System used to define individual industries, many chemical industry employees, including managers and chemists, have been transferred into other, service, sectors rs (C&EN, April 5, page 31).

If there is good news to be gleaned from the data, it is that BLS estimates the value of U.S. chemical production during the period, in constant 1996 dollars, will increase at an annual average rate of 1.2% to $450 billion. Thus, since production is rising while employment is dropping, one can infer that productivity will continue to increase.

The ongoing bad news is that all but two of the chemical subsectors will see declines in employment during the 10-year period. Employment in the pharmaceutical industry will rise at an average annual rate of 2.1% to 361,000, while the soap, cleaning compounds, and toiletries component will average a slight 0.3% rise per year to a 125,000-strong workforce.

The downturn will be led, according to BLS, by the "other chemicals" segment, the category that includes all of the chemicals that don't fit into specific product sectors. That segment will see employment drop by 3.4% per year to just 79,000 during the period.

THE LARGEST DECLINE in the specific product sectors is predicted to be in resin, synthetic rubber, and artificial fibers, where employment will contract at an average annual rate of 2.5% to 89,000.

This is followed by average annual declines of 2.4% for agricultural chemicals to 36,000 and 2.0% for basic chemicals to 140,000. The remaining sector—paints, coatings, and adhesives—is expected to slip an average of 1.5% per year to 62,000 employees.

If the outlook is not good for employment in the chemical industry, there is good news for chemists in a forecast of total U.S. occupation growth in all fields, not just chemicals.

BLS predicts that demand for all chemists—in occupations from high school and college teaching to industrial research—will increase by 11,000, or an average of 1.2% per year, between 2002 and 2012 to 95,000. While this number seems small compared with American Chemical Society membership of more than 159,000, it must be remembered that total ACS membership includes retired chemists, foreign members, and many members working in nonchemistry occupations.

The even better news, according to BLS, is that 40,000 new hires of chemists will be needed to reach this projection, partly because of job growth but mostly because of the need to replace retirees and others leaving their positions.

In related fields, BLS projects that demand for chemical engineers will be the same 33,000 in 2112 as in 2002. The ranks of materials scientists will increase an annual average of 1.3%, but only to 8,000. And employment of chemical technicians will grow an average of 0.4% per year to 72,000.


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