The chemical industry in the U.S. worth US$800 billion looks positive. The American Chemistry Council (ACC) has projected that the chemical production in the nation would continue to expand in this year and the next year as well. In 2015, the year-over-year industry output growth is expected to be at 3.2% and in 2016, it is estimated to be 3%. The Council is hopeful that better times are ahead. It estimates the chemical industry’s growth in the domestic market to exceed that of the nation as a whole in the next couple of years. The Council has projected the chemical industry to contribute significantly in the growth of the overall economy and register record trade surpluses by 2020.
The revival of the U.S. chemicals industry can be attributed to the innovative fracking technique which has led to the easy accessibility of natural gas and natural gas liquids such as ethane trapped in the shale formations. As natural gas liquids are cheaper than naphtha, the U.S. chemical companies are saving their money on feedstock. The shale gas revolution has become a boon for the overall industry. A few years back, the scenario was grim with the chemical manufacturers outsourcing their production capabilities. However, with the shale gas revolution, the industry is receiving more investments.
The ACC has revealed that around 238 chemical companies in the U.S. have announced projects of joint valuation of US$145 billion. Capital spending in the industry has spiked by 64% to US$33.4 billion in 2014. The Council expects that the industry would witness another hike in the spending to US$45.8 billion in 2018. Some of the major chemical companies in the U.S. such as Dow Chemical, Du Pont, Eastman Chemical, and Celanese are capitalizing on this positive growth and are increasing their production capacity.