Growth in global chemical output is expected to slow in 2011, according to the third quarter 2010 Situation and Outlook report from the American Chemistry Council (ACC; Washington, D.C., www.americanchemistry.com).
Total output of the global chemical industry is expected to grow by 8.9% in 2010, but then slow to a growth rate of 5.6% in 2011, the ACC report says. While the growth of chemical output in emerging markets will be stronger – 11.8% in 2010 and 8.4% in 2011 – the slowing trend still holds, the report says. Looking only at chemical output growth in the developed world, growth is anticipated at 6.6% in 2010 and 3.4% in 2011.
In the U.S., the ACC report says chemical output will rise by 4.1% in 2010, and will ease in following years, to 3.6% in 2011 and 3.3% in 2012. “With strong headwinds facing the U.S. economy, domestic demand is expected to weaken, and thus demand for chemicals is also expected to ease in the coming years,” the ACC report says.
It appears that growth in the global chemical industry will outpace global gross domestic product (GDP) growth, which is expected to rise by 3.5% in 2010 and 3.0% in 2011. “Growth in emerging markets has been robust, but there are signs that growth is moderating,” the ACC report points out. In the U.S., GDP is also growing at rates far lower than those expected in an economic recovery. U.S. GDP is forecast to grow by 2.7% in 2010, then moderate to 2.4% growth in 2011, rebound slightly to 2.8% in 2012.
The waning recovery may be due in part to a housing sector that continues to be depressed. “The housing sector…continues to struggle as foreclosures mount and high unemployment persists,” the ACC report says. “The recovery is fragile; multiple risks remain and the wrong trade, tax and other policy initiatives could derail activity,” the ACC report comments.