The US chemical industry will take until 2023 to recoup lost 2020 growth

The US chemical industry is a few months into recovery from the COVID-19 pandemic, but full recuperation won’t happen until 2023.

That’s the view from the American Chemistry Council (ACC), the US chemical industry’s main trade association. US chemical sales should recover this year, the ACC says, with a projected total of $525 billion, not including pharmaceuticals, up from $486 billion in 2020 and $509 billion in 2019. But employment, capital expenditures, and production volumes won’t return to prepandemic levels until late 2022 or early 2023, ACC predicts.

The trade group expects strong chemical demand through 2021 from consumer-focused industries such as auto, construction, and durable goods. That notion is supported by projections from the World Bank, which said in June that the overall US gross domestic product (GDP), a measure of economic growth, will be up by 6.8% for the year.

The ACC expects specialty chemicals, notably coatings, to have a better year than basic chemicals. Martha Moore, an ACC economist, says stimulus money from the US and other governments is helping fuel demand for consumer products, and pent-up demand for travel and other outings is bolstering transportation.

Moore’s colleague, Kevin Swift, warns that inflation could constrain recovery in the US and worldwide. He says a related concern among his peers at other industry groups is employee and supply shortages. “It’s all they talk about. They can’t get labor; they can’t get materials,” Swift says. He cites foams, semiconductors, and lumber as being in especially short supply, with kinked supply chains expected to continue at least into the fall.

Despite those risks, the US chemical industry is in a strong position compared with those in other countries, the ACC’s data suggest. Low prices for natural gas favor US petrochemical firms. The group forecasts a US trade surplus of about $34 billion in 2021, rising to almost $40 billion by 2023.