Volume 90 Issue 27 | p. 37
Issue Date: July 2, 2012

Cover Stories

Facts & Figures Of The Chemical Industry

Although 2011 was a profitable year for many firms, production figures signal a slowdown
Department: Business
Keywords: Facts & Figures

In 2011, the global chemical industry sought to nurture the green shoots of an economic rebound that first sprouted in 2010. And the year did get off to a strong start, but by the second quarter, chemical production in many countries began to decline again. Overall, global economies were growing, albeit slowly, but other macro­economic forces, particularly the European debt crisis, cast a cloud over business confidence. Nevertheless, many chemical firms increased or maintained profits for the year.

One secret to the chemical industry’s success in 2011 was high plant-operating rates, which allowed companies to maximize profits even while production growth slowed. With factories running at close to full capacity, chemical executives could raise prices while holding output steady.

But data for the actual production of chemicals are less encouraging about the industry’s health in 2011. Indexes of production show chemical output being very close to flat last year, and in some regions it was negative.

In Asia, both South Korea and Taiwan experienced growth in manufacturing while chemical output lagged. Chemical firms in Japan made an admirable comeback from the earthquake and tsunami that hit the country in March 2011. Nevertheless, they could not overcome the general—though likely temporary—economic contraction that resulted.

The financial crisis in the European Union was the largest drag on the global economy in 2011. The jobs picture improved slightly, although in the U.S. and Europe the number of long-term unemployed stayed stubbornly high. Employment at many chemical firms increased in 2011, although much of the boost came through acquisitions.

Manufacturers of consumer goods such as automobiles and mobile electronic devices were the chemical industry’s best customers in 2011, and they were willing to pay the higher prices the industry was charging. In addition, ever-increasing trade with the developing economies of Asia, the Middle East, and Latin America helped compensate for weaker demand in Europe.

C&EN staff members who collected industry data from the major chemical-producing countries and regions are Assistant Managing Editor Michael McCoy, Senior Correspondent Marc S. Reisch, Senior Correspondent Alexander H. Tullo (all three in C&EN’s Northeast News Bureau), and Senior Correspondent Jean-François Tremblay (Hong Kong). Senior Editor Melody M. Bomgardner (C&EN’s Northeast News Bureau) collected data and coordinated the work.

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