ACC Survey Sees More Chemical Growth

A survey by the American Chemistry Council (ACC) of its member companies predicts that U.S. chemical sales in 2005 will increase 5.6% over last year while net operating income will continue to show double-digit growth, rising 24.8%. The respondents are overwhelmingly optimistic, with 87% seeing sales gains against only 8% predicting declines. For net operating income, 97% expect higher results.

The survey results, which are weighted averages for respondents, are broken down among small, medium, and large companies and between basic and specialty chemical producers. The growth in sales will be led by the medium-sized firms, which expect an increase of 8.5%, while the large and small producers see growth of 4.5% and 7.2%, respectively.

Small and medium-sized firms will see above-average growth in net operating income. Small companies predict 39.3% growth, while those in the middle expect an increase of 41.1%. Large producers predict only an 18.5% improvement.

Specialty chemical companies expect a higher sales increase, at 7.6%, than do basic chemical firms, at 4.5%. But growth in net operating income for specialties is forecast to be 21.3%, less than the 26.8% that basic chemical companies are counting on.

Costs will continue to rise in 2005. The survey predicts an 8.2% increase in feedstock unit costs. Basic chemical producers expect a 9.4% increase, while specialty companies see a much smaller 5.9% rise.

The situation is reversed for energy unit costs, with specialty producers predicting a 7.5% increase and basic producers, a slightly lower 7.2% growth.