At the end of 2008, it is clear that the United States has entered at the very least a moderate recession. And economic growth in the rest of the world has slowed considerably, with many large economies (Germany, UK, Japan, etc.) and emerging economies (Estonia, Hungary) also having fallen into recession. The credit crunch that emerged in August 2007 cascaded into a full blown financial meltdown in 2008, the likes of which the majority of Americans has never experienced. Indeed, the contagion is proving more powerful than originally envisioned.
The general consensus is that the recession is spreading across the globe and will be characteristic of the business environment during 2009. Global industrial activity will parallel these trends. This is affecting the demand for chemistry worldwide. Global business of chemistry growth has essentially stalled since earlier in the year, with outright decline in the developed nations and slowing growth in most developing nations. As a result, global output will moderate significantly in 2008 and will further slow in 2009 before a recovery emerges in 2010. For the business of chemistry in the U.S., the recession will adversely affect demand into 2009, resulting in lower production volumes.
A major risk is volatile energy costs. A comprehensive U.S. energy policy ensuring adequate and diverse supply would go far in moderating volatility and supporting the competitive position of U.S. industry and maintaining the value-added that chemistry provides to our economy.
Prepared by ACC’s Economics & Statistics Department, the Year End Situation and Outlook summarizes the current economic status and upcoming challenges facing the $664 billion-a-year industry. Additionally, special sections highlight the global developments that impact the U.S. chemistry industry and will shape economic trends in 2009.
The 2008 Year End Situation and Outlook is available for $150. The price includes both the 2008 year-end and 2009 mid-year reports. To order, visit www.americanchemistry.com/store or call 301-617-7824.