Chemical & Engineering News 6/8/98: Facts & Figures

Chemical & Engineering News
June 29, 1998
Copyright © 1998 by the American Chemical Society

Facts & Figures for
the chemical industry

In many ways, the chemical industry around the world forged ahead in 1997. During the year, demand growth was fairly good for most chemicals products. And when local economies were not able to soak up the product, exports helped pick up the slack.

After a so-so 1996 in many geographic areas, 1997 turned out to hold welcome news for most geographic regions - except perhaps for Asia-Pacific. But even there the chemical economy was largely unhurt by the Asian financial crisis until the end of the year - late enough that the downturn did not turn 1997 into a negative year.

It was also a year of consolidations of companies and of turning away from traditional company focus - expecially in industrial chemicals. In the Asia-Pacific region, chemical companies were merging. In other parts of the world, they were often becoming life sciences oriented. Thus, in Europe such major chemical producers as Rhône-Poulenc and Hoechst got ready to spin off or divest their chemical operations. And in the U.S., Monsanto changed from a diversified chemical and pharmaceutical producer to a life sciences company - spawning a new chemical company, Solutia.

This year's compilation of the vast amounts of data involved in Facts & Figures was largely the undertaking of Assistant Managing Editor William J. Storck, Senior Editors Patricia L. Layman (London), Michael McCoy, and Marc S. Reisch; Bureau Head Ann M. Thayer (Houston); and Pacific-Rim Correspondent Jean-François Tremblay (Hong Kong).

Overall production of chemicals in the U.S. was strong in 1997, led by pharmaceuticals and industrial organic chemicals. Big-volume inorganics and some other categories suffered, however.	Despite increased production, prices and higher operating costs hurt earnings and profitability at many U.S. chemical companies. Spending on R&D and on new plants and equipment was cut.
Average employment for the U.S. chemicals and allied products industry declined once again in 1997, led by drops in production workers. This combined with increases in chemical production to boost industry productivity.	Economic expansion in the U.S. did not lead to corresponding increases in output of some big chemical end-use markets such as housing and automobiles. But markets for chemicals, such as agriculture, did grow.
The U.S. chemical industry maintained its trade surplus, which rose 14% over 1996, as exports increased 13% and imports grew 12%. Total world chemical trade rose 15% last year.	The chemical industries in Canada and Europe saw recovery in 1997 from a lackluster year before. In the Asia-Pacific region, the chemical industry posted gains despite the midyear economic downturn.