Washington, D.C. (April 17, 2020) – the U.S. chemical Council (ACC) today released a brief, mid-term update on the situation and outlook of the chemical industry. The update offers two options designed to capture a range of potential trajectories for the global and US economies as well as the chemical industry.
Kevin swift, chief economist of ACC in the United States, said: “ACC in the United States usually updates its economic forecasts twice a year, but we would like to provide an interim update reflecting some of the potential impacts of cowid-19.” “Despite the significant uncertainty in the forecast, short-term risk is downward until a rebound is likely in 2021.”
According to the latest data, US chemical production is expected to decline by 3.3% in 2020 and increase by 5.2% in 2021. Production of basic chemicals will fall by 2.9% in 2020 and rise by 6.7% next year. It is expected that the shipment of chemicals will decrease by 10.0% in 2020 and rebound by 7.8% in 2021. The decline in expectations reflects the plight of the end use market and export customers of chemical products in the United States.
To some extent, it offset the weakness of chemical production in the United States and strengthened the demand for chemicals used to cope with covid-19. In many chemical solutions used to fight against viruses, there are synthetic materials for personal protective equipment (PPE), raw materials for cleaning agents and disinfectants, and plastics for medical devices such as ventilators and intravenous infusion bags.
Automotive, construction and construction are key end use markets for chemistry. According to ACC’s forecast, car sales will drop sharply to 13.1 million in 2020, and will improve from 16.9 million in 2019 to 15.5 million in 2021. The number of new housing starts will drop to 1.08 million units and rise slightly to 1.19 million units in 2021. Sales of specialty chemicals will fall by 4.4% in 2020 and then rebound by 3.3% in 2021.
Martha Moore, senior director of policy analysis and economics at ACC, said: “even before the news of cowid-19 came out at the end of January, industrial activity started to weaken this year.” “Then supply disruptions from China began to seep into the US industrial sector. With further shocks to aggregate demand, US industrial production will fall by 8.4% this year and grow by 2.6% in 2021. “
According to the latest ACC data, global GDP is expected to shrink by 2.5% in 2020 and rebound by 6.0% in 2021. Global industrial production will decline by 3.9% in 2020 and then improve by 5.6% in 2021 as the industrial sector is hit by a series of covid-19 related closures, demand disruption and logistics challenges. Trade and business activities have experienced an unprecedented collapse, with world trade expected to shrink by 10.5% in 2020 and improve by 9.9% in 2021.
US GDP is expected to decline by 4.0% in 2020 and grow by 4.0% in 2021. Consumer spending will fall by 4.6% in 2020 and rebound by 4.4% next year. Before the outbreak of coronavirus disease in 2019, business investment in the whole economic sector has been low, and it is expected to decline by 9.7% in 2020 and grow by 3.0% in 2021.
More than 20 million people have applied for unemployment benefits in the past four weeks, and the unemployment rate is expected to reach more than 13% by the end of the second quarter of 2020, and then slow down steadily until 2021. After three years of growth, the number of employees in the chemical industry is expected to decrease by 28000 (5.1%) by 2020. Capital expenditure of chemical industry will decrease by 2.0% in 2020, but increase by 1.8% in 2021.
ACC’s analysis uses economic data and public information up to April 14, 2020 to assess the current situation and expectations. For the U.S. chemical industry, we use our own model (supplemented by other forecasters) to predict the possible development path of the industry in 2020-2022. In addition, we have taken into account the forecasts of manufacturing economists, economic forecasting consultants and other institutions.
The forecast in this report is based on the baseline scenario, that is, the United States covid-19 restrictions will be lifted before the end of the second quarter of 2020. ACC also put forward a “pessimistic” assumption, that is, the U.S. restrictions will be extended to the fourth quarter of 2020.
ACC’s “situation and Prospect of China chemical industry in 2020” will be published in June. It will provide a review of us and global chemical business and macro-economy, as well as data on production, trade, transportation, capacity utilization, end use market, R & D expenditure, capital expenditure, employment and wages of global and domestic chemical industries.
