Issue Date: July 5, 2010
Facts & Figures Of The Chemical Industry
The chemical industry was not unique in facing 2009 with trepidation. As the year started, the world was in the grip of an economic free fall that gained speed in the final quarter of 2008. This year’s Facts & Figures data include a raft of columns with negative numbers, even though 2009 was also the year that the recession officially ended.
Chemical production was already on the wane in 2008, prompting manufacturers to cut back sharply on inventories in a bid to save cash and slow their own output. But for that year, chemical shipments and trade still grew worldwide. In 2009, however, the recession finally announced itself in a sharp decrease in shipments; the chemical shipment decline was 15.0% in the U.S. and higher in Canada and most European countries.
Not surprisingly, the worldwide decrease in production and shipments was also reflected in trade volumes that declined almost across the board. The notable exception was China, whose economy was the last to feel the pinch of the recession and the first to rebound, due in part to massive government spending. U.S. exports to China increased 8.9% from 2008.
In all regions, demand for chemicals declined in the first quarter and stabilized during the second quarter. Chemical firms noted that consumers who were worried about their job security would not lead the economy out of the recession. Executives leaned on cost cutting as their preferred tool to preserve earnings. The attention to the bottom line led to respectable third-quarter results for many firms.
But the massive cutbacks made some analysts worry that the chemical industry would be weakened and unable to take advantage of an eventual rebound in demand. Chemical executives countered that their strategies would make their companies run leaner and create more profits for every uptick in volume.
The figures for 2009 show that chemical firms aiming to preserve cash left no stone unturned. Capital spending plummeted in the U.S., Europe, and Japan. In the U.S. and Japan, R&D budgets also took a hit, although European firms actually increased their research spending. Chemical industry employment shrank significantly in the U.S. and in Europe but held steady in Japan.
- Chemical & Engineering News
- ISSN 0009-2347
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