A new report says the chemical industry has become “a key driver of economic growth” this decade and that jobs growth in chemicals and plastics has given the economy a boost.
“The [chemical] industry surge this decade in investment, jobs, and incomes has been largely spurred by low natural gas prices, a result of the rapid incorporation of new drilling techniques to extract shale and other unconventional gas supplies in the U.S.,” according to the economic report, which was prepared by information research firm IHS Global Insight Inc. for the U.S. Conference of Mayors and its councils on Metro Economies and the New American City.
“Investment in the U.S. is now competitive with overseas locations. And the new gas fields have spurred investment not only in the Gulf of Mexico region, but across the U.S.,” said the report. As an example it pointed to the petrochemical cracker plant scheduled to be built near Pittsburgh, because of the area's proximity to shale gas supplies.
From 2010-11, among U.S. cities with 1,000 or more workers in the plastics and chemical industries, there was job growth of 10-25 percent in Muskegon, Mich.; Spokane, Wash.; Greeley, Colo.; Gadsden, Ala.; Warren, Mich.; Janesville, Wis.; 9.7 percent in Appleton, Wis.; and 9.5 percent in Poughkeepsie, N.Y., according to the report.
Job growth in chemicals and plastics, for that same period, was at least 8 percent in Knoxville and Cleveland, Tenn., and Blacksburg, Va.; 7 percent in Florence, Ala.; Norwich, Conn.; Lansing, Mich., and Morgantown, W.Va.; 6 percent in the Grand Rapids, Mich.; Asheville, N.C.; and the Detroit and New Orleans metropolitan areas; and 5 percent in Austin, Texas; Fort Wayne, Ind.; Williamsport, Pa.; Topeka, Kan.; Fort Collins, Colo.; Bakersfield, Calif.; Oshkosh, Wis.; Mobile, Ala.; Cedar Rapids, Iowa, and Anderson, S.C.
“Metro economies are critical,” the report said, being home to 83.7 percent of the country's population, 85.8 percent of jobs, 89.9 percent of wage and salary income, and 90.7 percent of the country's real gross domestic product. Those same economies have been responsible for 87.9 percent of U.S. recovery in real GDP, and 83.6 percent of employment growth “since the economy reached its trough.”
“Domestically, economic output from New York, Los Angeles, and Chicago are each greater than that of 45 states, and the combined production of the 10 largest metro areas is greater than that of the 36 least-producing states,” the report said.
Those same statistics indicate that large metros make crucial contributions to the global economy, it added. “Their health and growth are vitally important,” the report said, “as they provide markets for international trade, and foster the industries that will create innovations and inventions spurring domestic and international growth and development.”
Domestically, the U.S. chemical industry generates more than $760 billion in sales, exports nearly $200 million in goods and products and invests $50 billion annually in research and development.
“Export demand will be a key driver for U.S. business in the coming decade, as households and government remain constrained by debt burdens,” the report noted. Another vital factor will be “R&D spending in investment that boosts productivity.”
The report said the Chicago metropolitan area, led by its plastic product manufacturers, has the highest number of jobs in chemicals and plastics with 43,000, followed closely by Houston. It said that 28 metropolitan areas in the U.S. employ more than 10,000 people in those two industries and another 178 employ more than 1,000.
The IHS report is titled “U.S. Metro Economies: GMP [gross metropolitan product] and Employment Forecasts.” IHS Global is based in Englewood, Colo.
