Last year, the chemical industry continued its restructuring. Mergers of big chemical producers were announced or completed; new joint ventures were created; companies continued to trim or expand their portfolios; and traditional chemical companies were still working hard to change their focus in new directions such as life sciences.

These were all signs of a worldwide chemical industry in a slump--made much worse first by the financial crisis in Asia, then by problems in other countries as the crisis spread.

The result of the spreading crisis was a deterioration in economic fundamentals in the global chemical industry. Production of chemicals throughout the world generally fell from the previous year. Foreign markets tightened, causing shrinking chemical trade surpluses in many countries, including the U.S. Domestic demand growth for chemicals also slowed in many countries.

Thus, in the final analysis, sales, profits, and profitability declined for a great many chemical producers. This year's Facts & Figures for the Chemical Industry reflects the results of these global problems.

The compilation of the vast amounts of data from around the world for this special report has largely been the work of Assistant Managing Editor William J. Storck; Senior Editor Patricia L. Layman (London), Senior Editors Michael McCoy and Marc S. Reisch (Northeast News Bureau); Houston Bureau Head Ann M. Thayer; and Asia-Pacific Bureau Head Jean-François Tremblay (Hong Kong).

Production Overall U.S. production of chemicals increased modestly, led by agricultural chemicals, but output of the important large-volume basic chemicals and synthetics fell after a big 1997 gain.   Finances Lower growth in domestic demand plus falling prices resulted in lower sales, earnings, and profitability at many major U.S. chemical producers. Other important financial measures also tumbled.Page 40   Employment The U.S. chemical industry eked out a slight rise in the average number of jobs it provided last year and the number of chemical production workers also increased. Women made up 32% of the chemical workforce.Page 56   Markets Increasing gross domestic product and personal consumption expenditures were driven by big gains in some downstream markets for chemicals, such as housing. But this did not translate into big gains for U.S. chemical production.Page 60   Foreign Trade The U.S. chemical industry's trade surplus shrank 22% as imports jumped from year-earlier levels and exports fell in important areas such as the Pacific Rim and Latin America.Page 62   Foreign Chemical Industry The Asian economic crisis and its spread to other countries slowed--or even stopped--growth of chemical industries in Canada, Europe, and, of course, the Pacific Rim countries.Page 64

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