Strong growth in plastic resin exports provided a bright spot in a challenging 2023 year for the U.S. chemicals industry.
2023 "was a tough year for chemicals," Martha Gilchrist Moore, managing director — policy analysis and economics for the American Chemistry Council, said Nov. 28 on a media video call. "We saw an unprecedented inventory destocking cycle after COVID. It's played out now and we're seeing green shoots of improving demand."
Although overall North American chemical production is projected to be down almost 2 percent in 2023, U.S. resin production is set to grow 0.5 percent, led by export sales, which were up 14 percent through September.
"There's new [resin] capacity and the shale gas story is coming home," Moore said. "Competitive U.S. [resin] production is going out to the world market."
She added that the U.S. "has a competitive advantage in plastic resins because of shale gas … as long as we enjoy that advantage and global demand continues to grow, [the U.S.] will be a major supplier [of resins] to the global economy."
On a broader scale, Washington-based ACC expects U.S. GDP to grow 2.3 percent in 2023, before slowing to 1.1 percent in 2024 and rebounding to 1.8 percent in 2025.
"One of the big themes of 2023 was resilient consumer spending, but I think we're poised for a downturn," Moore said. "Loan payments are starting up again and pandemic savings are gone for a lot of people."
ACC expects U.S. housing starts to finish 2023 at a little less than 1.4 million units, but decline to 1.35 million in 2024 before bouncing back to 1.53 million in 2026. In U.S. light vehicles sales, ACC sees 2023 and 2024 as flat at 15.5 million but improving to 16.6 million in 2025.
And although U.S. resin production should follow this year's 0.5 percent growth with increases of 1.8 percent in 2024 and 2.5 percent in 2025, the ACC outlook isn't as bright for rubber and plastic products.
ACC expects production of those items to decline a little more than 4 percent this year and to decline almost 1 percent in 2024 before showing growth of almost 2 percent in 2025.
Overall North American chemicals production is set to decline almost 2 percent this year before growing 0.5 percent in 2024 and 2 percent in 2025. Among end markets, Moore said that although there's been a downturn in the industrial sector in 2023, areas such as oil and gas extraction, aircraft and motor vehicles have seen growth.
Overall U.S. chemical industry employment is set to tick up about 0.5 percent in 2023, an increase of about 3,000 jobs. Moore said this increase is the result of companies filling openings caused by labor shortages in recent years.
She added that sustainability continues to be a focus for chemicals firms, with ACC members saying in a recent survey that they plan to spend 25 percent of their capital budgets on sustainable manufacturing.