(hydrocarbonprocessing) -- Favorable oil-to-gas price ratios driven by the production of natural gas from shale will drive a renewed US competitiveness that will boost exports and fuel greater domestic investment and economic growth within the business of chemistry, according to the Year End 2012 Situation and Outlook, published by the American Chemistry Council (ACC) trade group.
After three years recovering from the recent recession, the global economy stumbled in 2012. The euro area entered a recession again, and a pronounced slowdown in China helped spread economic uncertainty around the world, the ACC said. In the US, although GDP surpassed its pre-recession peak, growth is slow and a typical business cycle expansion has yet to emerge. Despite this, the business of American chemistry remains a bright spot. The business of chemistry is a USD760 billion enterprise and one of America’s most significant manufacturing industries, with more than 96% of all manufactured goods touched by products of chemistry.
Though rising uncertainty over the fiscal cliff, debt ceiling negotiations and tax reform have hindered business confidence, the most important domestic energy development in the last 50 years is poised to reshape American manufacturing. Access to vast, new supplies of natural gas from shale deposits creates a competitive advantage for US petrochemical manufacturers, as MRC informed earlier. Ethane, a natural gas liquid derived from shale gas, is used as a feedstock by American chemical companies, giving them an advantage over foreign competitors that rely on a more expensive oil-based feedstock.
"Aided by a favorable oil-to-gas ratio, chemical exports grew 1.8% to USD191 billion in 2012, helping to turn a trade deficit into a modest surplus," said Kevin Swift, ACC’s chief economist and lead author of the report. "We’ll see exports continue to grow 4.7% in 2013 and another 6.2% to USD209 billion in 2014."
While overall shipments in the business of chemistry slipped 1.5% in 2012, they are expected to increase nearly 9% over the next two years, to USD794 billion in 2013 and USD833 billion in 2014.
MRC