Looking back to the beginning of this year, the chemical industry was faced with challenges including a global manufacturing slow down, turbulent trade policies, and uncertainty about the upcoming US elections. While in the midst of all of this, a global pandemic descended creating more uncertainty and changes within the industry. Now with a vaccine arriving and the overall state of the pandemic improving, what will the new year hold for the industry?
While the chemical industry played a vital role in the fight against COVID-19 by providing inputs for personal protection equipment, disinfection and sanitation products, medical supplies and more, it still suffered declines. The American Chemistry Council (ACC) estimates that chemical output fell 3.6% in 2020, with specialty chemicals doing even worse. This segment declined 10.8% this year. Not only was there a decline in output but there were also layoffs equaling about 14,000 jobs lost. In comparison to other industries the chemical industry only took a moderate hit, again, in thanks to the pivotal role it played in fighting COVID.
Although it may take a year or two before total trade flows return to pre-COVID levels, it is estimated that chemical production will rise 3.9% this year. Many industries that buy chemicals will ramp up and the US economy is expected to grow a similar 3.7%. This growth is expected for nearly all industries including, motor vehicles, aerospace, appliances, and plastic products.
While some potential changes implemented by businesses due to COVID may become permanent influencing these growth estimations and life in general, it is clear that better times are just around the corner. Make sure to contact your ChemCeed sales representative if you have any questions regarding changes or for your supply chain needs.