The U.S. Chemical is witnessing continued investments, strengthening export markets and robust demand across key-end markets like electronics, automotive and construction. These factors have helped the industry outpace the broader market over the past year despite many headwinds including sluggishness in China, weak demand in agriculture and damaging effects of the hurricanes.

Industry Performance

Investments Continues to Drive Growth

The American Chemistry Council (ACC), an industry trade group, envisions national chemical production (excluding pharmaceuticals) to rise 3.7% in 2018 and 3.9% in 2019. Higher demand across light vehicles and housing markets, capital investments and improved export markets are like to drive growth.

According to the ACC, the United States remains a valuable destination for chemical investment and domestic chemical makers continue to enjoy the advantage of access to abundant and cheaper feedstocks and energy. This is driving investment in chemical production projects.

The trade group noted that roughly 320 chemical projects have been announced worth more than $185 billion, 62% of which is a foreign direct investment. Moreover, roughly 65% of the chemical investment announced since 2010 are complete or under construction. New capacity is expected to provide a boost to chemical production as these investments come on stream.

The trade group expects capital spending in the chemical industry to rise 6.3% in 2018 and 6.8% in 2019 and eventually reach $48 billion by 2022.

Strong Export Markets Bode Well

The ACC expects improving export markets to contribute to solid growth of the domestic chemical industry. Strengthening export markets and increasing capital spending are driving chemical demand across key end-use markets such as light vehicles and housing. Housing activity is expected rise to 1.29 million in 2018 from 1.2 million in 2017.