Increasingly difficult conditions slowed growth of chemical industry in 2000

Squeezed by high feedstock costs and falling demand, the U.S. chemical industry posted slow growth in 2000 amid signs of this year’s downturn, while the world chemical industry expanded, according to “Facts & Figures for the Chemical Industry”, a special report in the current issue of Chemical & Engineering News. “‘Facts & Figures’ is the most complete statistical survey of the chemical industry, with an additional virtue that many sections present data over a decade,” writes Madeleine Jacobs, editor-in-chief of Chemical & Engineering News, the weekly newsmagazine of the American Chemical Society, the world’s largest scientific society. “No other magazine — indeed, probably no other single report — gives such a complete accounting of the global chemistry industry, thereby enabling our readers to compare operations at many different companies around the world.” Highlights of the 42-page special report include:

Production. U.S. chemical production in 2000 rose 1.7 percent over 1999 because of slowing demand. The total manufacturing sector, in comparison, grew at 6.1 percent.
Finances. After a strong first quarter, earnings declined last year, due to rising raw material and energy costs, the strong U.S. dollar, and falling demand. The final results showed that earnings rose just 2 percent on an 8 percent increase in sales, and profit margins fell to 7.2 percent from 7.6 percent a year before.
Top 75 Chemical Producers. Of the 75 largest U.S. chemical producers, based on reported chemical sales figures, the top five of 2000 were: DuPont, with $28.4 billion in sales; Dow Chemical, $23 billion; Exxon Mobil, $21.5 billion; Huntsman Corp., $8 billion; and General Electric, $7.8 billion.
Employment. With the loss of 7,000 jobs, total chemical industry employment fell for the second straight year as producers tried to rein in costs. Productivity increased by 2.6 percent last year over 1999 but hourly wages rose an even greater 3.2 percent, driving unit labor costs up a slight 0.6 percent.
International. Chemical trade between the United States and almost every major world region grew at a double-digit rate, but the chemical trade surplus continued to shrink. Imports grew partially because American companies are increasingly importing chemicals made at their own overseas plants.
    
Canada. The chemical industry posted another strong year, but the trade deficit increased for the fourth year in a row.     
Europe. The weak euro made European chemical products relatively cheap, stimulating exports, especially to the United States.     
Asia. The chemical industry continued to recover from the Asian financial crisis. In Japan, profits improved as exports and imports increased from 1999, returning to 1997 levels. South Korean production levels were higher than in 1997, and China and Taiwan both reported a rapid increase in production.

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