The American Chemistry Council (ACC) says following a strong fourth quarter in 2011, first and second quarter 2012 growth was weak and that underlying drivers will constrain growth for the remainder of the year.
In its Mid-Year 2012 Situation and Outlook, the ACC says the financial crisis in Europe and slowdown in China and other emerging economies continue to take a toll on demand for U.S. exports. "This outlook, coupled with weakness in U.S. manufacturing will likely produce muted demand for chemical products in the second half of 2012. Overall, American chemistry output is anticipated to rise by 0.5% in 2012, before accelerating to a 2.3% growth rate in 2013," states the report.
Despite a weakened outlook for GDP growth, global chemistry continues to advance, with expectations for output of chemicals in emerging markets to outpace production in developed countries. "China will continue to grow strongly, but at a slower pace than the previous decade. India, Africa, Latin America and other emerging markets will continue to expand, with the strongest growth in 2012 expected in specialty chemicals, consumer products, and agricultural chemicals. Overall, output is expected to grow by 2.3% in 2012, 4.3% in 2013, and 4.7% in 2014," states ACC.
Link to mid-year outlook.
Looking further ahead with an eventual resolution in Europe and rebounding growth in emerging markets, ACC expects growth in chemistry to accelerate in the coming years, growing faster than U.S. GDP.