IHS Chemical Week


McGladrey Survey Shows Chemical Sector on the Rebound


For each of the past five years, McGladrey has conducted a U.S. manufacturing and wholesale distribution survey and reported on trends in the broader industrial sector. Out of the 1,060 company executives interviewed this year, approximately 9% represented the chemicals, petroleum and plastics segment.  
While these findings indicate tempered optimism across the manufacturing sector, economic recovery remains fragile. I’ve spoken firsthand with several SOCMA members over the past year, and many report strong sales, on par with 2008 or better. This is certainly good news, particularly in light of rather significant concerns voiced by company executives about new legislation such as health care reform and pending legislation, such as TSCA reform, cap and trade, and the Employee Free Choice Act (EFCA).
While most of the data is aggregated, I’ve extracted findings specific to the chemicals sector:
•    General Business Outlook: Not surprisingly, the chemicals sector reports that some 33% of those surveyed indicated their company was “thriving and growing."  This is up significantly from 2009 (12%) and slightly ahead of 2008 (30%). This compares well to 24% of all company executives  surveyed.
•    Domestic vs. International Activity: Roughly three in four chemical companies report anticipated sales for domestic orders to increase this year, compared to 46% for international business.
o    In the same category, 84% of companies report import sales increased year-over-year (vs. 80% in 2009). Conversely, 76% indicate export sales increased year-over-year (vs. 82% in 2009).  
•    “Green” Products: Roughly 75% indicate they are offering “green” products (although it is unclear what the specific definition of “green” is, and a several executives are skeptical as to whether customers will pay a premium and whether the movement is a bunch of smoke and mirrors.
A few other findings across the broader manufacturing sector of interest:
•    Growth Strategies: While the top three growth strategies remains unchanged year over year, “increasing sales to new customers” showed the biggest boosts (92% in 2010 vs. 82% in 2009)
•    Operational Effectiveness: 30% of companies report they are expanding capacity, double the 2009 figure. Capacity reductions dropped significantly year-over-year (8% this year vs. 26% last)
•    Offshoring Activites: For the second consecutive year, companies indicate a declining interest, with only 15% citing they will move at least a portion of their business overseas.  
Today, more than ever, there appears to be greater uncertainty about the potential dire implications which our elected officials here in Washington may levy on the chemical industry. The survey finds a high level of concern among executive over the possible business impact of legislation currently pending in Congress.  Specifically, nearly 50% said they’re “very concerned” about additional regulatory requirements.  
Socma remains vigilant about addressing the needs of small and mid-sized batch, custom and specialty chemical manufacturers on chemical risk, security, and other issues impacting the industry. In an effort to ease the growing regulatory costs weighing heavily on small manufacturers, last month we called on Congress and the Administration to avoid imposing large, new financial burden that would threaten their businesses. For this reasons, and others outlined in the McGladrey report, we believe it is reasonable to call on our nation’s leaders to truly commit themselves to supporting US chemical manufacturing.

contact us | about us | privacy policy | sitemap

ihsCopyright © IHS, Inc.All rights reserved.Reproduction in whole or in part without permission is prohibited.

North Asia Russia Southeast Asia China India/Pakistan Middle East Eastern Europe Western Europe Central America Canada USA Australia/New Zealand South America Africa