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Financially, the record was even more confused. In a widespread effort to revamp the industry's structure and enhance operating efficiency, many compa...
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Facts & Figures for the chemical industry

32

June 9, 1986 C&EN

Reflecting the sluggish performance of the overall economy, the U.S. chemical industry in 1985 experienced a year of moderate growth but mixed financial results. For the industry as a whole, production increased, with plastics and a handful of specialty products setting the pace. On the other hand, in such major areas as inorganic chemicals, man-made fibers, and especially agricultural chemicals, 1985 was a dull if not downright depressed year.

Financially, the record was even more confused. In a widespread effort to revamp the industry's structure and enhance operating efficiency, many companies, both large and small, undertook a dizzying assortment of asset write-downs and spinoffs, staff reduction programs, and various accounting changes. The resulting special charges and credits drastically affected 1985 income statements for the industry as a whole,

Those moves, however, probably will set the stage for a better record in 1986. Output is likely to edge higher again, albeit rather shakily. Profits already are looking stronger. And the weaker U.S. dollar prom­ ises relief from one long-standing problem by improving the compet­ itive position of U.S. chemical pro­ ducers against their counterparts overseas. The data presented on the fol­ lowing pages of C&EN's annual Facts & Figures issue illustrate these trends statistically, providing a mea­ sure of the chemical industry's re­ cent performance in the U.S. and, to a lesser extent, in several other important chemical-producing na­ tions. The data pulled together here come from a diverse variety of sources, such as government agen­ cies, trade associations, and inter­ national organizations, as well as the individual companies that com­ prise the complex industry. The data, in many cases, have been used by C&EN's staff to develop analytical measures and comparisons that help put the industry's recent results into better perspective.

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at a glance Section One: Production In the U.S. chemical industry, out­ put continued to expand in 1985. But the pace slowed markedly from the year before. And for many sec­ tors of the industry, production ac­ tually fell a bit from the 1984 level. Plastics was a strong area. On the other hand, man-made fibers had a mediocre year, as imports cut into U.S. demand. A poor year for U.S. farmers, meanwhile, resulted in a decline in production of agricultur­ al chemicals. Page 34 Section Two: Finance Earnings declined for U.S. chemical companies in 1985, after three years of growth, as sales stagnated, prices came under pressure, and chemicals produced abroad cut into markets for made-in-America products. Cap­ ital spending, meanwhile, contin­ ues to expand, although the increase this year is likely to be slim. Budgets for R&D also are showing little or no prospects for increases this year. Page 46

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Section Three: Employment The number of workers employed in the chemical industry declined last year, after rising in 1984, to the lowest level in the past decade. But with output up slightly, the produc­ tivity of the industry's work force improved from the year before and unit labor costs were down. Page 61 Section Four: Foreign Trade World trade in chemicals has slipped from its peak level of 1984, largely because of lower imports on the part of underdeveloped nations. And the long-standing U.S. trade surplus in chemicals continued to shrink, as imports rose but exports, hurt by a strong U.S. dollar, dwin­ dled. Page 66 Section Five: Foreign Chemical Industries Outside the U.S., 1985 was a mixture of good and bad for chemical pro­ ducers. Profitability generally was up for chemical companies in West Europe. However, earnings deterio­ rated in Japan's petrochemical in­ dustry, and the outlook remains poor there. Unsatisfactory prices eroded the profits of chemical com­ panies in Canada. Page 70

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June 9, 1986 C&EN 33

1I Production by the U.S. Chemical Industry

Production up modestly in 1985 Most chemical growth rates decline throughout 1985 Production, % annual growth rate3 25 20 15 ι

10 5 0 -5 -10

• • 1 • m

-15 -20 -25 1982

1983

1984

1985

Inorganics Organics Plastics Fibers Total 1986

ill

ge running annual growth rates in production of major plastics, inorganic and organic chemicals, and all als, and in shipments of man-made fibers. Sources: International Trade Commission, Bureau of the Census, of the Plastics Industry, Textile Economics Bureau

Chemical output continues to grow sluggishly Production index, 160

1977 = 100

~7U r ^ ^

140

r -

,

—

•

'

Chemicals and allied pt products

^ ^ ^ Û f ^

ι;

120

Synthetic ] materials5

fy^'

γ,/

1

Ν

^ B All industry

s4*B0^^^^^

.

if f J>^--"-"-"~l·

" 'jj

^0T .Λ

100

//'NN ./ • ,•-„

/%-rwise indicated

Sper share

Divi­ dends, $ per share

Divi­ dend yield. % of price

Stock price range. Sper share

Priceearn­ ings ratio

$937,672 868.673 851.982 737.048

15 19 26 16

$433,867 393.765 348.190 342.785

$89,691 87.177 69.808 76.466

$323,263 485.325 458.077 346.364

1.1% 4.3 46 2.6

3.5% 9.3 9.8 71

$0.05· 3.31 3.58» 2.37»

$2.20 2.20 2.20 2.20

5.6% 6.0 59 7.8

$44V-34 42V31 1 * 45V29 34V21 1 *

785.0 11.1 104 11.9

$451,903 371.819 382.273 364.133

1.2 2.0 20 25

$203,972 172.219 175.722 159.181

$35,057 24.228 19.305 20.516

$134,714 206.421 211.081 200.546

3.2% 2.9 08

12.5% 10.3 34

($3.85)*· 3.63 2.74 0.571

$0.80 0.65 051 0.48

2.2% 2.2 18 32

$43%-29% 35%-23 38 V18% 19V10

7.5 104 26.0

Rohm $2,051,000 2.042.011 1.875.937 1.828.027

$141,000· 172.219» 137.603 85.605'

$1,619,000 1.540.570 1.489.815 1.365.163

2.0 20 2.7 25

$581,000 555.945 518.360 546.623

$159,000 134.253 71.534 125.927

$821,000 872.687 882.964 807.853

6.9% 8.4 7.3 47

17.2% 19.7 156 106

$2,011 2.24» 1.78 1.11'

$0.70 0.60 0.50 0.47

3.1% 3.1 2.5 4.5

$26%-18% 23%-16 27-12% 13%-7%

111 87 11.1 94

$235,919 234.930 207.074 208.373

$5,471 5.4231 6.337 5.303

$139,307 133.941 144.997 163.326

1.5 16 1.5 13

$82,796 73.261 76.044 75.475

$19,189 11.557 9.804 16.148

$49,575 47.660 58.450 55.067

2.3% 2.3 3.1 25

11.0% 11.4 108 96

$1.89 1.661 1.75 145

$0.69 0.65 0.58 0.56

3.5% 3.9 39 4.1

18V141* 17^12 18%-9%

10.5 10.0 84 94

S u n C ' h e m i c a l Ccup. 1985 $883,864 $ 4.069» 1984 872.948 25.218 1983 746.609 9.529 1982 664.257 14.871'

$666,118 587.932 497.715 523.799

14 2.0 18 19

$202,984 178.292 141.771 134.351

$45,196 38.052 27.666 27.371

$187,735 174.164 157.917 162.130

0.5% 2.9 13 22

2.2% 14.5 6.0 92

$0.52» 3.23 1.24 1.97'

$0.48 0.48 0.48 0 48

1.4% 1.7 20 26

$ 39-28% 33-24% 30%-17% 24%-13%

64.8 8.9 196 95

Union C a r b i d e C o r p . 1985- $6,596,000 ($38000)' 9.508.000 341.000· 1984 9.001.000 218.000· 1983 9.061.000 310.000 1982

$ 8.461.000 10.402.000 10.226.000 10.552.000

13 18 18 19

$4,927,000 6.383.000 6.282.000 6.356.000

$ 649.000 670.000 761.000 1.179.000

519.000 4.808.000 4.860.000 5.095.000

3.6% 2.4 34

7.1% 4.5 61

($0 38»* 1.61' 1.04· 149

$1.13 1.13 1.13 1 13

6.1% 6.9 54 67

524V12 21%-10% 24%-17 20%-13%

101 20 1 11.3

Williams Cos. 1985 $3,139,600 1984 3.388.700 1983 2.167.000 1982 1.691.315

$ 31.600 144.500» 54.000 29.682»

$4,337,400 4.534.000 4.686.400 2.369.791

09 10 07 17

$2,786,400 3.252.800 3.193.000 1.513.712

$259,000 262.000 253.400 171.895

$1,212,800 1.284.000 1.173.900 1.029.411

1.0% 4.3 25 18

2.6% 11.3 46 29

$0.92 4.21· 1.79 1.00·

$1.40 1.25 1.20 1.20

4.7% 4.6 5.1 56

$32%-26% 31V23 30 V 16*4 29%-13%

32.3 65 131 212

Witco Corp. 1985 $1,448,929 1984 1.495.831 1983 1.385.744 1982 1.305.418

$56,774 62.602 52.022 29.842

$794,368 739.488 715.472 643.911

23 2.2 21 22

$360,950 348.740 313.794 291.914

$71,093 65.720 44.901 54.130

$399,486 358.497 319.334 281.013

3.9% 4.2 38 23

14.2% 17.5 16.3 106

$3.85 4.28 3.60 2.10

$1.48 1.40 126 120

4.0% 4.2 46 72

J41V33 39V27% 37%-17% 19%-13%

9.7 78 76 80

$3,468,373 3.172.897 2.824.128 2.566.909

1.9 17 1.7 11

$1,368,542 1.236.572 1.069.200 901.059

$292,900 334.800 311.800 266.600

$1,870,663 1.602.700 1.417.883 1.310.886

13.8% 13.0 11.9 111

24.9% 25.1 245 221

$3.88 3.34 2.86 2.37

$1.40 1.20 100 0.84

2.5% 2.8 2.2 2.5

$ 72-39% 48%-36% 53%-36% 41%-25%

144 128 15.6 14.1

A m e r i c a n H o m e Products Corp. 1985 $4,684,742 $717,140 $3,201,746 1984 4.485.470 655.828' 2.849.732 1983 4.856.501 627.233 2.864.104 1982 4.582.096 560.103 2.602.346

33 33 29 26

$859,414 769.623 812.370 725.352

$179,347 141.891 204.680 153.812

$2,098,293 1.905.733 1.826.964 1.614.192

15.3% 14.6 129 122

34.2% 34.4 34.3 34.7

$4.70 4.26' 4.00 3.59

$2.90 2.64 2.40 215

5.0% 5.2 50 53

$66%-50% 55%-46% 54V41% 48-33%

12.4 12.0 12.0 113

Baxte 1985 $2,335,000 1984 1.800.422 1983 1.842.544 1982 1.671.445

1 8 15 16 19

$1,682,000 767.636 746.304 628.720

$198,000 171.652 192.464 148.812

$2,963,000 1.106.731 1.151.109 1.061.009

5.8% 8.1 118 112

4.6% 13.1 189 176

$0.85 1.03» 154 132

$0.37 0.33 0.28 0.23

2.5% 1.8 1.1 1.1

$16%-12% 24%-11% 31%-20 25V15%

172 178 166 154

1985 1984 1983 1982

Stepa 1985 1984 1983 1982

$

PHAFIMACEUTIC ALS Abbo!It L a b o r a t o r ies $465,335 1985 $3,360,273 402.575 1984 3.103.962 347.617 1983 2.927.873 289.123 1982 2.602.447

$137,000 145.147» 218.055 186.885

$6,839,000 2.000.753 2.127.037 1.792.710

a From continuing operations; includes special charge for restructuring program, before taxes, of $38 6 million but excludes net loss from operations and on disposal of discontinued dental businesses of $30.9 million ($2 80 per share) b Includes gain on sale, retirement, and revaluation of assets, before taxes, of $21 7 million c From continuing operations, excludes provision for loss on disposal of discontinued operations of $2 8 million ($0 27 per share), d Deficit, e Includes special charge for restructuring program, before taxes, of $39 6 million f Excludes net loss resulting from asset redeployment/divestiture program of $2.2 million ($0 32 per share), g Includes net gam on disposal of assets of $4 6 million ($0 07 per share) h Includes net gain on sale of oil and gas properties of $3.6 million ($0 05 per share). I Includes net gain on shutdown and disposal of assets of $10.4 million ($0.40 per share) j Includes nonrecurring net loss on writedown of equipment of $2 6 million k Includes loss on disposal of assets, before taxes, of $9 1 million. I From continuing operations; excludes equity in net loss of affiliates discontinued operations of $12 9 million ($1 71 per share), m Pro forma, after adjustment for repurchase of common stock, sale of consumer products businesses, special charges for restructuring program, and other special gains and losses η Excludes extraordinary charge related to accident in Bhopal. India, of $ 18 million ($0 08 per share) ο Excludes nonrecurring net charge for clos­ ing of facilities of $139 million ($0 66 per share), ρ Excludes net loss from operations and net gain on disposition of Edgcomb Metals Co operations of $5.0 million ($0 15 per share) q From continuing operations; excludes net income from discontinued operations of $47 million ($0.15 per share), r From continuing operations, excludes net income from operations and net gain on sale of discontinued businesses of $76 3 million ($0 50 per share) s Excludes special net charge for closing three plants and revaluation of assets of $ 116.1 million ($0 82 per share) June 9. 1986 C&EN

59

Finances of the U.S. Chemical Industry

2^

NET INCOME

Year

N.M

Net

sales

Income

Total assets

Current ratio

Net plant % of not .ind Net Capital % of equipment worth worth expenditures sales Money figures m thousands of dollars unless otherwise indicated

Bristol-Myers Co. S4.444.000 1985 1984 4.189.400 1983 3.917.000 1982 3.599.900

$531,400 472.400 408.000 348.700

$3,557,300 3.100.800 2.888.300 2.665.800

23 24 22 22

$925,800 791.100 701.700 653.600

$222,000 191.600 165.000 170.000

$2,287,100 1.998.100 1.788.900 1.624.000

12.0% 11.3

Eli Lilly & C o . 1985 J3.270.600 1984 3.109.200 1983 3.033.700 1982 2.962.711

$517,600 490.200 457.400 411.828

$3,859,400 3.556.500 3.401.200 3.155.125

17 16 17 1.8

$1,374,000 1.280.400 1.212.600 1.135.575

$207,100 205.300 199.900 236.642

$2,293,400 2.133.800 2.108.400 2.055.460

15.8% 15.8 15.1

Merck & Co. $3,547,500 1985 3.559.665 1984 1983 3.246.139 3.063.017 1982

$539,900 492.967 450.855 415.137

$4,805,100 4.489.697 4.119.098 3.591.652

19 19 19

$1,882,800 1.912.778 1.715.207 1.557.490

$237,600 274.425 272.756 295.106

Pfizer 1985 $4,024,500 1984 3.854.500 3.750.000 1983 3.453.600 1982

$579,700 507.900 447.100 332.800

$4,341,500 3.927.700 3.830.000 3.644.500

2.1 21 20 19

$1,268,300 1.155.600 1.157.000 1.124.700

$195,800 144.000 214.900 265.500

$620,710 565.627 459.462 386.843

37 15 31 38

$149,954 135.685 107.651 98.079

$23,150 38.155 20.955 15.815

Scher ing-Plough C o r p . 1985 $1,927,100 $192,600 1984 1.874.300 177.200 1983 1.808.500 178.500' 1982 1.817.900 183.500

$2,683,800 2.436.200 2.309.800 2.341.200

1.4 1.2 1.3

$991,800 912.400 841.400 747.500

$140,300 173.700 177.700 180.400

SmithKline B e c k m a n Corp. 1985 $3,256,600 $514,400 1984 500.3001 2.949.200 1983 2.835.391 485.990· 1982 2.968.667 455.157

$3,534,500 3.077.600 3.085.409 2.765.900

18 2.0 18 21

$1,285,300 1.093.000 988.857 971.302

Squibb Corp. 1985 $2,041,745 1984 1.886.037 1983 1.768.891 1982 1.660.766

$226,599 197.172 173.274· 153.636

$2,396,592 2.072.188 1.887.783 1.871.882

20 21 22 21

Sterling Drug 1985 $1,753,724 1984 1.827.295 1983 1.901.171 1982 1.796.153

$153,310 144.853· 136.844 131.970

$1,588,991 1.429.618 1.437.440 1.297.989

Upjoh in C o . 1985 $2,008,486 2.179.060 1984 1983 1.986.106 1.828.730 1982

$203,193' 173.272 160.225 126.020

$2,376,873 2.248.363 2.195.048 2.013.985

15 19

Warner-Lambert C0 . 1985 $3,200,069 $237,7041984 3.166.657 223.887 1983 3.108.325 200.496 1982 3.245.967 174.970·

$2,286,187 2.377.098 2.368.879 2.344.259

A. H . Robins C o . $706,134 1985 631.891 1984 563.510 1983 482.324 1982

$61,414* (461.613) ' 58.221' 48.693·

1 7

$1.81 1.50 1 16

102

3.2 29 33

$3.69 3.36 3 06

139

22.6% 23.0 21.6 20.0

$1.60 1.49 1.375 1.30

4.9 44 47

$2,536,900 2.443.260 2.339.013 2.147.988

15.2% 13.8

21.3% 20.2

139 136

193 193

$3.79 3.35 3.05

$2,805,900 2.365.100 2.074.700 1.869.500

14.4% 13.2

20.7% 21.5

119 96

216 178

104 97

10.1

18.2

$1,389,600 1.235.100 1.186.500 1.278.500

10.0%

13.9% 14.3

$248,000 241.500 232.914 304.784

$2,070,100 1.952.100 1.970.793 1.749.407

15.8% 17.0 17.1

$701,439 617.724 564.613 511.821

$120,342 115.629 109.800 87.280

$1,409,382 1.266.517 1.173.399 1.037.989

11.1% 10.5

98 9.3

14.8 14.8

20 25 25 26

$358,190 370.273 366.328 356.535

$74,176 73.158 63.189 80.068

$907,646 894.943 879.655 825.944

8.7%

1 8

$852,054 809.534 754.954 675.869

$152,637 136.738 155.016 137.273

$1,295,085 1.134.154 1.057.288 973.028

10.1%

$868,931 863.179 826.232 768.571

$138,774 142.461 165.854 153.507

$819,279 910.125 869.980 815.864

1 2

15 17 1 9

%

of price

$3.86 3.45 3.00 2.59

— — 19.0%

1 9

Divi­ dend yield.

23.2% 23.6 22.8 21.5

— 10.3

1 8

$ per share

Divi­ dends. $ per share

($132,933)· (210.353)· 305.636 267.945

8.7%

9.5 99 101

153

7.9 72 73

8.0 81 69

7.4%

7.1 65 5.4

271

280

$3.44 3.08 2 73

213

$2.53 (18.44)' 2.40

198

$1.60 1.50

2.8%

15.2 13.6

$55V32'4 33V261* 34y28'4 32V22 1 ?

119 90 102 102

$68 7 ,-45', 48V39't 52V407t 44V32

15.0

136 116

140 140

$1.48 1.32 1.16 0.92

3.7 30 28

$56' 4 -37S 42V293* 44V335* 40V25

—

$24V5]2

$0.00 0.72 0.62 0.52

$1.68 1.68 1 68

24.8% 25.6 24 7 26.0

$6.56 6.19· 5.85'

551

$2.85 2.80 2.65 2.39

16.1%

$4.20 3.68 3.3V 3.01

$1.72 1.48 1.365 1.28

16.9% 16.2 15.6 16.0

$2,561 2.39· 2 24

$1.19 1.15 1 11

217

106

15.7% 15.3 15.2

130

$3.29' 2.83 2 64 2 09

$1.34 1.28 1.175 1.14

29.0% 24.6 23.0 21.4

$3.052.81 2.51 2.20·

$1.50 1.48

156

3.6%

168

142 1 40

3.2%

4.1%

2314-121Ϊ

2.7 3.3

29V16

3.3%

4.6 40 48

4.3%

5.1 40 3.5

2.6%

3.2 28 32

3.5%

4.3 43 43

2.6%

4.4 4 1

47

3.2%

4.6 47 56

PrlceearnIngt, ratio

$68V49 52V41 47 7 ,-31 1 4 37-25^

3.4 3.0 37

$3.77 3.50 3.40· 3 39

150 144

3.1%

Stock price range. $per share

2ovn'4 $66'?-3514 40-33 48V36*4 43V26' 4

132 12.0

131 153 136

14.4

153

59

—

95 79

13.5

104 12.5 10.3

$79V52^ 60V50 76V55134 77V57 *

10.1

$82'?-4914 54V37'? 55V42 7 , 50V29

15.7

$41V26*4 30-23'? 29V221* 29 V 1^4

133 112 116 114

$70V33\ 36-22'? 34V23' t 29*4-19

158 103 109 116

$49V333* 36',-2814 35-25*4 30V19S

136 115 121

89 11.3

123

125 149 132

11.3

a Excludes extraordinary net gain from tax benefit associated with operating loss carry-forward of $14 4 million ($0 59 per share) b Net loss; includes income, before taxes, from litigation set­ tlement of S1 2 million and net charge for reserve for Dalkon Shield claims of $489 1 million ($ 19 53 per share) c Deficit d Includes income, before taxes, from litigation settlement of S2 3 million e Includes income, before taxes, from litigation settlement of $3 1 million, f From continuing operations; excludes net gam on sale of discontinued home products business of $11.6 million ($0 22 per share) g Excludes net gam on sale of Industrial Business Group of $3 3 million ($0 04 per share) h From continuing operations, excludes net income of discontinued Industri­ al Business Group of $3 5 million ($0 04 per share) I Excludes extraordinary net gam on early extinguishment of debt of $27.0 million ($0 52 per share) and net loss on disposal of Latin Ameri­ can operations of $27.6 million ($0 53 per share), j From continuing operations; excludes net loss from divested Hilton-Davis chemical business of $43 6 million ($0 73 per share) k From con­ tinuing operations; excludes net loss on operations of divested environmental control business of $15 million ($0 02 per share) I From continuing operations; excludes net loss from operations and sale of polymer chemical business of $238.000 m Excludes nonrecurring net charge for write-down and divestiture of assets and restructuring program of $553 3 million ($7 10 per share) η Includes nonrecurring net credit of $12 million ($0 15 per share) 60

June 9. 1986 C&EN

3

Employment in the U.S. Chemical Industry

Chemical work force drops steeply in 1985 In 1985, the number of workers employed by the U.S. chemical industry fell to about 1,042,000, the lowest level of employment since 1975. A steady decline throughout 1985 and in the early months of 1986 wiped out the modest recovery that occurred in 1984. Employment also dropped again in the petroleum in­ dustry last year, but rubber manufacturers continued a trend toward higher numbers of workers. Despite the overall downturn, two chemical sec­ tors—soaps, cleaners, and toilet goods and paints and allied products—added a modest number of employees in 1985. Employment held steady in the industrial in­ organic and organic chemicals segments. How­ ever, producers of plastics, synthetics, drugs, and agricultural chemicals trimmed their work forces. Major chemical companies, as a group, added em­ ployees in 1985. Notable among the giant firms were Dow Chemical, which increased employment last year after several years of cuts, and Union Carbide, which cut back sharply on the number of its workers.

Chemical employment has declined steadily since the end of 1984 Millions of employees3 1.10

1.08

ΓΠ \

1.06

K

\ 1.04

^1V^N.

v

^f

1.02

Il 11111111 11m i l l i n n

1 i 1 LLLLLLLL i n i i i i i i n 1985

1984

1983

1982

1986

a Seasonally adjusted employment m U S chemicals and allied products industry; March and April 1986 figures are preliminary Source: Department of Labor

INDUSTRIAL EMPLOYMENT: Stagnant at best throughout chemical industry 1985

All manufacturing

All employees* (thousands) 1984 1983

1975

1985

Production workers" (thousands) 1984 1983

1975

1985

Workweek'* (hours) 1984 1983

1975

19.426

19.412

18.434

18.323

13,214

13.310

12.530

13.043

40.5

40.7

40.1

39.5

1.042

1.048

143 168 205

143 177 206

1.015 149 218 167

576 72 112 94

582 72 117 96

579 77

580 90 136

41.9 41.7

122 62

94

Paints and allied products

145 62

93 30

Industrial organic chemicals

164

164

60 92

61 92

163 60 89

150 65 82

89 29 84

41.0 41.0 41.4

41.6 41.5 42.0 41.0 41.1

41.0 41.4

84

41.9 42.1 42.2 40.7

148 63

1.043 151 176 201 142 60

196 711

608

Chemicals and allied products Industrial inorganic chemicals Plastic materials and synthetics Drugs Soap, cleaners, and toilet goods

Agricultural chemicals Miscellaneous chemical products Petroleum and coal products Rubber and miscellaneous plastics products

177

189

795

782

194

30 84

115 98

73 33 74

37

83 38

53

53

50

42 47

108 615

111

609

118 551

123 465

36

42.3

41.3 41.7

40.6 41.0 40.6

41.0

40.5

42.8

42.5 42.1

41.8

41.3

41.3 42.5 40.4

43.7 41.7

43.9 41.2

41.2 39.9

43.3 42.7

43.0

41.8 43.0 41.1

a Domestic employment b Workweek of production or nonsupervisory workers Source: Department of Labor

EMPLOYMENT OF SCIENTISTS, ENGINEERS: Down slightly for chemical producers Thousands*

Total, all industry Chemicals and allied products Industrial chemicals Drugs and medicines Other chemicals Petroleum refining Rubber products

1985b

570.3 66.9 25.1 30.9 C 10.9 13.4 na

544.5 67.1 26.7 30.1c 10.3 13.2 ηa

522.1

509.8

66.0

61.6

27.2 28.2 10.6 14.7 na

25.9 25.6 10.1 15.6 8.1

487.8 54.7

450.6 51.4

21.6 23.3 9.8 13.0 10.3

20.9 21.6 8.9 10.8 na

423.9

404.4

50.0 21.4 20.8 7.8

48.3 21.3 19.5 7.5 9 9 79

10.1 8.1

a Full-time equivalent number of R&D scientists and engineers in industry, as of January of each year b Preliminary c Partly estimated na Source: National Science Foundation

:

382.8 46.4

364.4

363.3

44.4

20.6

20.1 16.6

45.2 21.1 15.6 8.5 8 4 8 4

17.8 8.0 8 9 9 1

7.8 8 6 8 6

not available separately, but included in total.

June 9. 1986 C&EN

61

3

Employment in the U.S. Chemical Industry

CHEMICAL EMPLOYMENT: Modest growth last year, but sales per employee declines 1982

Thousands

1985

Air Products American Cyanamld

18.7 36.4

38.2

16.7 38.7

Celanese Crompton & Knowles

18.5 2.3

21.5 2.3

23.3 2.4

25.3

Dow Chemical

53.2

49.8

Ethyl Freeport-McMoRan

10.5 4.5 44

11.0 4.8

H. B. Fuller

116.9 25.4

W. R. Grace Hercules

Monsanto Nalco Chemical

Olin

30.8 2.8

31.5 3.0

31.8 3.2

30.9 3.1

30.8 3.0

63.8

56.8

55.9

53.5

53.2

53.0

14.5 5.2

15.0 2.7 34

16.0 3.9 34

16.5 3.5 3.3

16.0 3.7 30

16.0

92.0 26.1

82.8 27.4

69.1 27.1

69.1 26.3

64.0 25.7

36

3.6

10.6 4.2

10.3 3.9 63.9

35 99

3.1 97

4.1

3.8 62.9 4.1

33 99 36 61.5 4.2

61.9 3.8

21.7

22.7

22.4

22.0

14.0 37.4

13.9

13.9 36.3 5.8 13.3

2.3

54.5

56.6

13.0

14.0

4.8 41

5.0 4.0 82.2 24.5

95.5 24.2

3.3 89.0 25.9

43.8

3.8 28

42

3.6 8.4 43

56.1

50.8

48.8

52.2

3.6 10.6 4.2 57.4

5.1

4.8

4.6

4.6

4.7

61.8 4.3

14.9

17.8 9.8 37.7

18.2

17.5

9.8

20.3 10.7

21.0 12.8

4.2 11.9

37.0 4.4 11.4

9.5 37.0 4.5 11.5

36.6 5.6 13.5

37.3 5.6 13.2

13.3 38.2 6.4 13.3

0.9 98.4

0.9 99.5

0.9 103.2

0.9 110.3

0.8 116.1

0.9

08

08

07

115.8

113.4

113.7

113.1

531.7

528.1

530.2

570.1

579.3

578.1

558.4

552.2

539.1 $69.0 $38.4

37.5 4.6 11.8

Stepan Union Carbide

0.9 91.5 540.7 1.7%

SALES PER EMPLOYEE

14.3 44.0

3.7 84

9.9

ANNUAL CHANGE

26.3

13.4 39.4

14.6 44.2

16.2 41.8 29.5 2.5

37 90 42

Pennwalt PPG Industries Reichhold Chemicals Rohm & Haas

TOTAL EMPLOYEES

4.3 102.6

13.7

15.8 42.6

18.9 40.2

8.7 5.2

37

International Flavors International Minerals Lubrizol

17.7

1977

1981

0.7%

-0.4%

-7.0%

$115.5

$117.5

$111.6

$108.6

$39.7

$40.7

$39.7

$38.7

-1.6% $110.7

36.6 6.5 13.0

6.5 13.1

1.1%

$103.3

3.5% $94.2

$81.0

2.4% $74.2

$41.3

$44.2

$42.4

$40.1

0.2%

3.6

-1.1%

($ thousands, current) SALES PER EMPLOYEE

$40.1

a

($ thousands, constant 1972 ) a Based on producer price index for chemicals and allied products Note: Data are not restated tor acquisitions, divestitures, and similar changes Data for 1985 do not account for work-force reductions that took effect during first-quarter 1986.

WAGES: Organic chemical workers continue to earn highest wages in chemical industry 1985 All manufacturing Chemicals and allied products Industrial inorganic chemicals Plastic materials and synthetics Drugs Soap, cleaners, and toilet goods Paints and allied products Industrial organic chemicals Agricultural chemicals Miscellaneous chemical products Petroleum and coal products Rubber and miscellaneous plastic products

Hourly earnings* 1984 1983

June 9. 1986 C&EN

1985

Weekly earnings* 1984 1983

1975

$ 9.52 11.57

$ 9.18

$ 8.83

$4.83

$385.56

$373.63

$354.08

$190.79

11.08

10.58

5.39

484.78

464.25

440.13

220.99

12.82 11.72

12.30 11.10

5.73 5.28

483.89

237.22 214.37

10.23 9.89 9.75 13.43 10.73 10.08 13.43 8.29

534.59 495.76 440.75

517.83 468.42

10.75 10.26 10.07

11.66 10.55 9.72 9.65 9.34

13.99 11.02 10.60 14.04 8.53

5.18

12.73 10.24

5.15 5.01 6.25 4.93

9.63 13.28 8.00

5.11 6.48 4.39

a For production and nonsupervisory workers m domestic employment Source: Department of Labor

62

1975

420.66 416.90 605.77 470.55 433.08 603.72 350.58

416.36 408.46 406.58 577.49 459.24 421.34 586.89 345.69

443.10 398.52 396.62 382.94 541.03 431.10 397.72 582.99 329.60

212.38 209.09 202.91 258.13 209.53 206.44 266.98 175.16

Employment in the U.S. Chemical Industry

Chemical productivity rebounded in 1985

. . . thus unit labor costs fell slightly

% year-to-year change

% year-to-year change

12

14

10 -

8 6

3

-j

Chemicals and allied products

•" γ

η

θ

i * #

•

1

•

"H

4

All manufacturing

2

r -j

\ X

ο

-2

1975

j^

\ - * * ^ //VY

6

-2

-4

All manufacturing

10

/

4

2

, ;

12

\ \

" \v Λ

A

1

\

-

Chemicals and allied products

\^W

%""Ί

-4

I

I

I

I

I

I

I

I

76

77

78

79

80

81

82

83

84

85

-6 1975

I

I

I

I

I

I

I

I

I

76

77

78

79

80

81

82

83

84

1 85

Note: Productivity is output per workhour, calculated by dividing indexes for production by indexes tor workhours of production employees Unit labor costs are labor costs per unit output, calculated by dividing indexes for wages by indexes for output per workhour. Sources: Department of Labor. Federal Reserve Board. C&EN calculations

Productivity in the U.S. chemical in­ dustry improved in 1985, but most of the increase came as a result of falling employment rather than from increased production. And in spite of the improvement, produc­ tivity gains for manufacturers of chemicals and allied products lagged those for all manufacturing industries. In 1985, production of chemicals increased 3.4% but work hours in the chemical industry declined 2.4%. As a result, productivity in­

creased 5.9%, compared with a 4.0% increase in 1984. At the same time, chemical pro­ ducers were holding labor costs in check. Hourly production wages in 1985 increased just 4.3% over the year before. Consequently, unit la­ bor costs fell to their lowest level since 1981. Unit labor costs in 1985 were down 1.5%, compared with a 0.7% rise in 1984 over the previous year. However, for all manufacturing, improvements in the productivity

scene was even better. For all manu­ facturing, productivity had in­ creased 9.2% on a 6.7% rise in pro­ duction and a 2.2% fall in workhours. In 1984, productivity for all manufacturing was up only 1.5% from the year before. Like productivity, unit labor costs for all manufacturing outperformed chemicals, falling 5.4% from the year before on a 3.3% rise in hourly production wages. In 1984, unit la­ bor costs for all manufacturing were up 2.3%.

PRODUCTIVITY: Improvement last year as output rises despite a decline in workhours Index·*, 1977 = 100

1985

1984

1983

1982

1981

1980

1979

1978

1977

1978

1975

CHEMICALS A ALLIED PRODUCTS Production

127.1

122.9

115.7

1056

116.0

111.1

113.3

106.3

100.0

92.0

79.3

Workhours

93.7

96.0

93.9

95.2

101.7

101.0

103.1

102.2

100.0

97.3

92.6

Productivity

135.6

128.0

123.1

110.9

114.1

110.0

109.9

104.0

100.0

94.6

85.6

Hourly production wages

180.2

172.7

164.8

155.0

141.8

129.2

118.2

109.2

100.0

91.9

83.8

Unit labor costs

132.9

134.9

133.9

139.7

124.4

117.5

107.6

105.0

100.0

97.2

97.9

Production

127.1

119.1

107.1

99.4

108.6

105.9

110.7

106.1

100.0

94.1

84.0

Workhours

93.9

96.0

87.7

87.0

97.9

98.9

106.2

104.5

100.0

96.1

90.4

Productivity

135.4

124.0

122.2

114.3

110.9

107.1

104.2

101.5

100.0

97.9

92.9

Hourly production wages

166.9

161.5

155.4

149.6

140.7

128.1

118.0

108.6

100.0

91.9

85.0

Unit labor costs

123.2

130.2

127.3

130.9

126.8

116.6

113.2

107.0

100.0

93.8

91.5

All

MANUFACTURING

Sources: Department of Labor. Federal Reserve Board. CAEN estimates June 9. 1986 C&EN

63

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Foreign Trade

4

World chemical trade cools off World chemical trade cooled off last year. After a 7.5% jump in 1984, world chemical exports slipped nearly 3% to an estimated $142.5 billion. World trade numbers, however, have to be taken with a grain of salt. To determine a total world chemi­ cal export figure, it's necessary to go to several differ­ ent sources, including the United Nations (always two years late with its data), the Organization for Economic Cooperation & Development (always one year late), the European Economic Community, and several individ­ ual countries. The big problem, of course, lies in the way these various organizations use exchange rates to convert foreign currencies into U.S. dollars. Although currency conversion always is a problem, in the past few years, and especially last year, the prob­ lem was compounded because the exchange rate for U.S. dollars fluctuated wildly.

U.S. TOTAL TRADE BALANCE: Slips further into the red $ Billions

Total exports Total imports Trade balance

Nevertheless, it seems apparent that several major chemical exporters suffered setbacks last year. Chemi­ cal exports from EEC, for one thing, were down. EEC exports to the U.S., however, increased a healthy 11% last year. The losses in chemical exports, then, had to come from developing country markets, just as was the case for exports by U.S. chemical producers. U.S. chemical exports dipped 2% last year to $21.5 billion. Shipments held up adequately to such devel­ oped markets as Western Europe, Japan, and Canada. But important markets in developing areas, particular­ ly Latin America and Asia, weakened considerably. Many countries in those regions cut back on imports to cope with their own domestic economic problems. Meanwhile, the expected improvement in U.S. chemi­ cal exports as a result of the weakening dollar had not yet taken hold.

U.S. CHEMICAL TRADE BALANCE: The surplus continues to erode 1985

1984

1983

1975

$21,759 14,533 7,226

$22,336 13,697 8,639

$19,751 10,779 8,972

$8705 3696 5009

$ Millions

1985

1984

1983

1975

$213.1 345.3 -132.2

$217.9 325.7 -107.8

$200.5 258.0 -57.5

$107.1 96.1 11.0

Chemical exports Chemical imports Chemical trade balance Source: Department of Commef ce

Source: Department of Commefce

Chemical trade balance shrinks further.

. . . but U.S. share of world markets climbs

$ Billions 2 25 I

U.S. share of world chemical exports, % a 17 Γ

Exports _

20 16

\ 15 Imports

ΙΟ Γ

10 Trade balance

I I I I II I I II I I I II I II I II II 1983

1984

June 9. 1986 C&EN

1.1

I I I I I I I I I I I 1985 1986

a Running 12-month totals Source: Department of Commerce

66

14 L

1975

76

77

78

79

80

81

82

83

84

a U S . chemical exports as a percentage of total world chemical exports less U S chemical imports b C&EN estimate Source: Department of Commerce

Ui 85°

More and more labs are looking into the automated QE-300 NMR system for superior results at a price of just $ 1 6 0 , 0 0 0 . For powerful analytical insight... you need fast, accurate NMR results that you can interpret at a glance. With the General Electric QE-300 system you will not have to accept a compromise system that 300 MHz to 200 ΜΗ/ companson (plotted at equivalent Hz/cm scale) of the olefinic region of Linalool resolving all four protons clearly at 300 M H ; Improved signal to noise ratio can also be seen

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', Λ

/ \ /

• 2(K)VM.· Λ h

PPM

\ /

almost does the job. For the lab, a 300 MHz system can now be your minimum acceptable field strength with the best price/performance ratio. Better dispersion, faster analysis, and easier interpretation result directly from a 300 MHz super­ conducting magnet under the control of our custom analysis software... software that adapts with a few keystrokes to fit your specific analytical needs. With the QE-300 you obtain exceptional highresolution proton and carbon spectra from the same sample in just minutes. Plus, you have the option to observe a wide variety of other nuclei ranging from phosphorus through nitrogen. Our hardware/ software options allow you to customize the system to fit your lab. To find out what more there is to see in the QE-300 system, call (415) 490-8310 or write General Electric, NMR Instruments, 255 Fourier Avenue, Fremont, CA 94539.

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CIRCLE 27 ON READER SERVICE CARD

4

Foreign Trade

WORLD TRADE: Chemical business cools

U.S. TRADE: More with Europe

$ Millions

CHEMICAL EXPORTS World U.S. Canada EEC, 10 countries Belgium-Luxembourg

$142.500 3 $146,421 21,759 22,336 4,132 4,187 68.871 73,307

France Italy Netherlands U.K. West Germany Switzerland Japan

19.751 3.645 70.104

$61,212 8.705 1.063 32.697

9.838 9.106 22,477

23,369

5,878 7.697

5,503 7.447

5,539 6.813

2,760 3,885

14,533 4.549

13,697 4.544

10.779 4,052

57,273 5,855 10,854 8,518 6,825 7,425 13,858 3,664

53.601 5.437

51,382 5,184

3,696 1,772 22,094

9.973 7.813 5.804

9.533 7.307 5.534

8.470 13.084 3.397

7.764 12.494 3.315

3,123 5,218 1,447

8,072

8.112

7.008

2,059

Switzerland Jaoan CHEMICAL IMPORTS U.S. Canada EEC, 10 countries Belgium-Luxembourg

$136,260

6.216 11.842 6.116 10.536 10,491 22,209

6,450 12,623 5,497

France Italy Netherlands U.K. West Germany

1984

1985

6,449 12,574 6,203 11,005 11.014

3.460 5.405 2.681 5.076 4,826 10,447

2,522 4,337 2.805 2,677

a C&EN estimate Source·: United Nations. Organization for Economic Cooperation & Development. European Economic Community, individual country data

U.S. CHEMICAL E>[PORTS Canada $ 2,698 Western Europe 6.742 Eastern Europe 368 Communist Asia Japan Rest of Asia Middle East Latin America Australasia Africa Other TOTAL

513 2.908 3.024

5

510

492

306 $22,336

304 $19,751

189 $8705

$3,131 6,392

$ 2.390 5,020 197

$870 1709

Eastern Europe Communist Asia

380 163 1.412 457 218 1.216 231

Africa Other TOTAL

353 2,607

265 $21,759

3.681 704

7.118

Australasia

2,961 3,292 429 3,827

$1223 2699 84

456

400

Western Europe

Middle East Latin America

275 645

$ 2,546 5,892 306

589 990 272 2135 248 271

U.S. CHEMICAL IM PORTS Canada $2,913

Japan Rest of Asia

$ 2,752 6,497

203 222 $14,533

842

325 157 1,312 377 124 1,208 251 196 224 $13,697

2.859 423 3,273 696

131

23 16

1,099 283 113 924 234 227

387 42 40

161 $10,779

201 $3696

144 240 24

Source: Department of Commerce

U.S. TRADE, BY PRODUCTS: Organic chemicals, plastics, and drugs lead advance in imports Chemical Import·

Chemical exports $ Million·

Organic chemicals Inorganic chemicals Radioactive materials Dyeing, tanning, and coloring materials Pigments, paints, and varnishes

Medicinals and pharmaceuticals Flavors, perfumes, cosmetics, toiletries Cleaning and polishing materials Fertilizer, manufactured Explosives and pyrotechnics

Plastics and resins Pesticides and disinfectants Miscellaneous TOTAL

1985

1984

June 9. 1986 C&EN

1975

$ 4,265 2,064

$ 3,477

$1042

1.615

1,417

1.394

952 300 145

835 196 75 28

1975

1985 $4,576 1,984

1984

$6,012 1,967

$ 6.093 2.184

$ 5,326 1,838

1,311

1,213

139 322

1,421 158 335

$2431 943 314

163 328

92 152

352 266

358 232

2.708 478 292

2.628 498 308

2,494

866 190 172

1.084 577

931 521 118

2,160

1.815 146

100

3.777 614 1.878 $21,759

4.050 707 1.992 $22,336

a Included in miscellaneous chemical products Source: Department of Commerce 68

1983

1983

493 295 1.267 87

3.732 630 1.885 $19,751

235 115 30

103

1.142 84

703 370 90 997 64

1173 a 1229

1,631 399 1,005

1.484 308 797

1.098 251 717

227 a

$8705

$14,533

$13,697

$10,779

$3696

1083 60

172 967

626 25

263

Wfefi you're talfangPyridines, we're listening

The chemistry of pyridine and its derivatives is one of the most versatile in industry today. But to take advantage of this versatility for your process problems, you need access to technical expertise and assistance to develop new applications. You need someone to talk to. At Neper a, we're listening. We're ready and waiting to discuss your problems and ideas with you, and assist you in developing the pyridine or derivative chemistry that's right for you. We're ready to talk and share our knowledge and expertise. Nepera is a subsidiary of Schering AG. Our plants in Harriman, NY and Bergkamen, West Germany, along with sales offices throughout the world, stand ready to service your requirements for quality, experience, and reliability.

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The people to talk to for pyridine chemistry.

Nepera Inc. Subsidiary of Schering AG · West Germany Fine Chemicals Division Nepera Inc., Route 17, Harriman, NY 10926, Tel: (914) 782-8171. TWX 5102494847 Schering AG, Fine Chemicals Division, Postfach 650311, D-1000, Berlin 65, West Germany. Tel: (0 30) 4 68-52 00. Telex: 18 20 3-30 sch d Other Worldwide Locations: Munich; Hamburg, WG; West Sussex, UK; Rungis, France; Milan, Italy; Sao Paulo, Brazil (Berlimed Productos Quimicos); Osaka, Japan (Nihon Schering KK)

CIRCLE 42 ON READER SERVICE CARD June 9. 1986 C&EN

69

5^

Foreign Chemical Industries—Western Europe

European chemical companies had another good year in 1985. West Germany's Bayer retained its position as top in total sales. BASF moved into the number two slot past Hoechst, which now stands at number three. Profit margins improved for just about every company. Laporte Industries achieved a creditable 10%. CibaGeigy and Fisons earned about 8% on sales. Montedison experienced the biggest turnaround, netting a profit for the first time in a decade. The changing value of the U.S. dollar is causing concern to European business executives. In 1985 as a whole, the dollar gained in strength against West European currencies. But about midyear a change set in, and the dollar began to weaken. The trend is continuing. As a result, European chemical producers face stiffer price competition from their U.S. counterparts.

Gains continue for chemical production Production index, 1980 = 100

France

West Germany U.K. Italy

1975

76

77

78

79

80

81

82

83

84

85

CHEMICAL INDUSTRY TRENDS: Output, prices generally higher as employment holds steady $ Billions (U.S.)

1985

1984

1983

1982

1981

$ Billions (U.S.)

BELGIUM* Sales

1985

1984

1983

1982

1981

cd

WEST GERMANY Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 50.5 $ 49.5 $ 49 7 $ 48.5 $ 51.6 25.1 24.0 26.1 22.9 23.8 15.0 14.0 13.6 13.0 13.3 2.4 2.7 2.2 2.8 3.1 111.1 103.4 96.4 108.8 101.6 113.9 113.7 108.7 121.6 118.1 557 550 549 559 548

Imports'1 Capital spending Production index* Price index* Employees (thousands)

$ 14.1 $ 13.6 $ 13.2 $ 14.1 $ 15.3 9.2 8.8 8.9 9.5 9.1 6 4 63 66 63 69 0.4 0.4 0.4 0.4 0.3 103.1 101.1 107.3 117.3 113.3 110.7 133.7 126.0 139.9 145.0 88 90 89 88 88

FRANCE b Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 32.3 $ 30.9 $ 30.1 $ 30.4 $ 33.4 11.5 12.8 12.2 11.2 11.9 10.0 9.2 8.9 9.1 9.2 1.1 1.0 1.1 1.2 1.2 124.4 121.2 110.2 114.9 108.8 128.2 160.0 153.1 139.9 114.2 282 289 276 279 286

NETHERLANDS Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 13.9 $ 13.6 $ 13.1 $ 12.5 $ 13.6 11.9 12.9 12.5 12.0 11.3 6.7 7.1 7.2 6.8 8.0 0.7 0.7 0.6 0.6 0.8 97.7 124.0 122.0 111.0 100.0 114.4 114.0 120.0 116.0 115.0 90 91 89 89 88

U.K.b Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 26.3 $ 25.2 $ 25.6 $ 28.2 $ 37.6 12.1 11.0 10.5 11.5 12.3 9.2 8.2 8.8 8.1 7.9 1.7 1.4 1.4 1.9 2.5 119.4 114.9 108.7 98.7 100.8 131.6 125.1 119.1 113.5 106.3 326 329 330 338 395

ITALY Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 24.4 $ 23.6 $ 22.9 $ 22.7 $ 24.1 6.2 5.7 6.6 5.0 5.6 74 86 93 79 7.8 1.1 1.1 0.9 1.1 0.9 106.2 110.0 100.0 98.3 98.1 124.1 159.7 148.2 134.9 111.9 241 233 260 271 251

SPAIN b c Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$ 15.9 $ 15.2 $ 14.2 $ 15.2 $ 15.7 2.7 2.2 2.2 2.9 2.3 3 1 30 28 29 3.1 0.2 0.4 0.3 0.3 0.4 113.9 111.0 104.5 100.0 98.3 147.4 176.7 163.6 131.0 116.9 241 244 240 242 243

Exports0

SWITZERLAND 6 Sales Exports Imports Production index* Price index* Employees (thousands) SWFDFN Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

$

6.7 $ 6.6 $ 6.7 6.7 $ 6.5 $ 5.4 5.4 5.7 5.4 5.5 3.4 3.3 3.3 3.3 3.6 104.2 115.7 103.0 122.9 109.6 106.4 104.9 106.8 113.8 109.1 na 65 65 68 63

$

4.2 $ 4.1 $ 3.9 $ 4.0 $ 4.1 1.6 1.8 1.8 1.6 1.9 27 26 2.5 2.7 25 0.3 0.3 0.3 0.3 0.3 109.4 104.8 116.2 114.6 113.2 120.4 108.8 155.5 147.0 135.5 44 41 44 44 43

$

2.0 $ 1.9 2.0 $ 2.1 $ 2.1 $ 1.1 1.0 1.5 1.2 1.2 09 09 1.0 10 11 0.1 0.1 0.1 0.1 0.1 100.6 101.7 121.0 110.0 120.0 112.5 128.1 123.6 117.9 132.6 17 16 16 17 18

NORWAY

Sales Exports Imports Capital spending Production index* Price index* Employees (thousands)

a 1980 = 100 b Excludes fibers, c Includes rubber and plastics processing d Includes Luxembourg for exports and imports Sourc··: National agencies and European Council of Chemical Manufacturers Federations (CEFIC)

70

June 9, 1986 C&EN

The J\l< >rmalizati< >n Pairiii

The Normalization Pairing A scientist at the General Motors Research Laboratories has developed a new method for accurately determining the effectiveness of safety belts in preventing traffic fatalities. The approach may be used to answer a wide variety of questions using data bases that lack conventional measures of exposure.

T

Effectiveness Estimates

Drivers

Right Front Passengers

0

10

20

30

40

Safety belt effectiveness (%)

Weighted Average: (41.1 t 3.8)% Figure 1: Weighted estimates of safety-belt effective­ ness by subject, with standard error. Estimate I pairs subjects with right-front passengers; 2 pairs subjects with drivers; 3 and 4 pair subjects with occupants of all other seating positions. Figure 2: Schematic representation of a sample double pair comparison.

HERE IS A serious problem that researchers often en­ counter when trying to analyze large collections of information. It is the problem of measuring exposure. Though a collection of data may contain a large number of cases, and though the facts in each case may be highly detailed, there may be no way of comparing events selected for in­ clusion in the collection against the normal occurrence of similar events in the world at large. One such data base is the Fatal Accident Reporting System (FARS) maintained by the U.S. Department of Transportations National Highway Traffic Safety Administration. FARS details all fatal accidents in the U.S. since January 1, 1975—more than 300,000 crashes. However, it lacks an explicit measure of exposure. FARS contains, for example, the number of fatalities classified by safety belt use. But fatalities among users depend on two considerations: first, the effectiveness of safety belts; and second, the crash involvement

First Set Crash type: Number of each type:

a

rx = d/e, where d=a+c and e=b+c

differences between users and nonusers—that is, the exposure of belt users to crash involvement. If crash involvement were independent of belt use, it would be a simple matter to calculate the effectiveness of safety belts in preventing fatalities. How­ ever, belted drivers have fewer crashes, and the crashes they do have tend to be of lower average severity than those of unbelted drivers. Now a scientist at the General Motors Research Laboratories has developed an approach to drawing inferences from FARS using only the information contained in the file. Dr. Leonard Evans has designed a method for comparing the effects of isolated characteristics by using two sets of crashes. In each set, a subject occupant is paired with an other occupant. In the first set, the subject exhibits the characteristic to be stud­ ied; in the second, the subject does not. The other occupant is chosen to have similar characteristics in both sets of crashes (e.g. always unbelted), and thereby acts as a measure of exposure. To illustrate the workings of the method of double-pair comparison, Dr. Evans first applied it to a study of the effects of safety belt use on fatality risk. He could define the effectiveness of safety belts in terms of the ratio: R

=

Κ

"Nu Second Set Crash type: Number of each type:

1

J

r2=m/n, where m=j+l and n=k+l KEY:

BELTED

Ο DRIVER

D PASSENGER

FATAL

NON-FATAL

m

N'jq U h (s)f„(s)ds N'iq U u (s)f u (s)ds

where N' is the number of crashes per year by unbelted drivers, s is crash severity, fu(s) is the probability that a crash involving an unbelted driver has a severity s, qi )u (s) is the probability that an unbelted driver will become a fatality in a crash of severity s, and q, )h (s) is the probability that a belted driver will become a fatality in a crash of severity s. R,riK. is a ratio of new to

old fatalities—assuming a formerly unbelted population became a belted population, with nothing else changing. But while Nu, the number of unbelted driver fatalities, can be determined from the FARS data, Nb, the number of these who would still have been fatalities had they been wearing safety belts, clearly is not coded in the data base. Dr. Evans applied the double-pair comparison method to determine a quantity, R, that would, under plausible assumptions, accurately estimate RtriK.. Figure 2 shows the pattern of the first application. In it, one set of crashes paired belted drivers and accompanying unbelted front-seat passengers, generating a ratio, r lt of belted driver fatalities per unbelted passenger fatality. The second set paired unbelted drivers with unbelted front-seat passengers, leading to a ratio, r2, of unbelted driver fatalities per unbelted passenger fatality. This yields a value of R = rllr2 as a measure of safety-belt effectiveness.

I

N ADDITION to calculating R for driver subjects using front-seat passenger others, effectiveness was also calculated for right-front passenger subjects using driver others. Additional calculations were made pairing driver or right-front passenger subjects with passengers in any other seating position. Figure 1 reflects the synthesis of these estimates. Estimates 1 and 2 represent subject and other occupants disaggregated into three age categories and averaged. Estimates 3 and 4 represent pairings of subjects with occupants in other seating positions and averaged. In all, Dr. Evans calculated 46 estimates of R. The weighted average of these gives a safety-belt effectiveness of (41.4 ± 3.8)%. This should be an accurate estimate whenever the

distribution of severities is the same for both sets of crashes in each double-pair comparison. Moreover, a formal analysis showed rxlr2 to be an accurate estimate of Rtrm. under much less stringent restrictions. Even when the distributions of crash severity differ for belted and unbelted drivers, Dr. Evans concluded that the simple ratio R = rllr2 = nd/me is indeed an accurate estimate of safety-belt effectiveness. Dr. Evans' confidence in the method rests on some key assumptions. But, as he points out: 'One of the beauties of the method is its ability to remove the biasing effects of confounding interactions that may undermine those assumptions. It is necessary only to disaggregate occupants into different categories of the suspect variable. "Because of bias elimination, and the ability to create a measure of exposure, the method of double-pair comparison lends itself to a broad range of investigations. We can estimate, for example, fatality risk as a function of helmet use by motorcyclists, or safety-belt effectiveness in different accident types. More broadly, we can estimate fatality risk as a function of age, sex, or alcohol use. We may even have revealed a trend in trauma response, in general, as a function of sex and age."

General Motors

S (MARKOFEXCEUENCd

THE MAN BEHIND THE WORK Dr. Leonard Evans is a Senior Staff Research Scientist in the Operating Systems Research Department at the General Motors Research Laboratories. He received his undergraduate degree in physics from The Queen's University of Belfast, and holds a D. Phil, in the same discipline from Oxford University. He was a PostDoctorate Fellow at the National Research Council of Canada in Ottawa. Since joining GM in 1967, Dr. Evans has published research on such diverse topics as atomic physics and trauma analyses. His current area of concentration is traffic safety research. He is a member of the Human Factors Society and is a Past President of the Society's Southeastern Michigan Chapter. In 1985, Dr. Evans received the Society's A. R. Lauer Award "for outstanding contributions to the human factors aspects of highway safety."

5

Foreign Chemical Industries—Western Europe

MAN-MADE FIBERS: Production of noncellulosics expands but cellulosics stagnate Millions of lb

Change, 1983-84 1981 1984 1983 1982 1985 NonCelluNonNonNonNonNon6 6 6 losics cellulosics* Cellulosics cellulosics" Cellulosics cellulosics Cellulosics cellulosics Cellulosics cellulosics Cellulosics cellulosics

West Germany Italy Spain U.K. France Benelux countries Switzerland Ireland Portugal Austria

372

1753 1454

68 80

633 545 c 437

208 d 44

364 226 140

95 0 0

129 63

1

265

1654

334 65 70 330 d

61

1166 a 539 541c 437

206 218

94 0

189 204

130 106 53

0 2

118 95 53

1696 1324 a 578 559 c 452

359 68 73 305 d

268

1511 1091 a 507

315 102

1735

322 133 111

4% 0 10

3%

506 c

95 263 d

1115 a 526 612 c

298 d

10 10 -3

83

435

100

444

119

-3

90 0 0

124 0 0 3

229 197

1

4

— —

83

144 0 0 7

77

1

198 183 114 99

251

51

251

53

257

111

8 22 19

-32 -28

-50 -1

a Includes polypropylene b Excludes polypropylene c Includes cellulose acetate filament, d Excludes cellulose acetate filament Source: Comité International de la Rayonne et des Fibres Synthétiques

PRODUCTION: Nearly equally split between increases and decreases Millions of lb

FRANCE Sulfuric acid Hydrochloric acid Chlorine Sodium hydroxide Ammonia Benzene Toluene Xylenes Ethylene Propylene Butadiene Formaldehyde Methanol Polyethylene Polypropylene Polystyrene Polyvinyl chloride Synthetic rubber Phosphate fertilizers (P 2 0 5 ) ITALY Sulfuric acid Nitric acid Phosphoric acid Chlorine Sodium hydroxide Ammonia Benzene Toluene Xylenes Ethylene Propylene Butadiene Phthalic anhydride Formaldehyde Acetic acid Carbon black Polyethylene Polystyrene Polyvinyl chloride Synthetic rubber Nitrogen fertilizers (N)

Change 1984-85

1985

1984

1983

1982

9433 1446 3060 3196 4422 1399 89 277 4749 2730 634 203 na 2047 933 1074 1804 1199 1340

9898 1686 3103 3274 5170 1343 87 188 4581 2652 667 210 697 2045 871 1060 1737 1218 1495

9024 1483 2872 3064 4312 1373 90 199 4563 2455 620 208 761 2070 842 1056 1796 1125 1577

8858 1514 2759 2939 4180 1133 69 113 4112 2277 569 175 753 1938 692 972 1729 1045 2447

-5% -14 -1 -2 -14 4 2 47 4 3 -5 -3

9596 2575 889 2021 2257 3249 1078 766 919

9370 2420 996 2095 2359 3233 1179 688 871 2504 1244 399 213 325 140 380 1602 695 1493 514 7134

907 1 2261 999 1974 2219 2494 1160 658 804 2337 1143 380 298 312 237 339 1564 725 1391 504 6003

8818 2247 970 1701 1999 2804 841 580 594 1923 981 345 298 275 342 334 1167 674 1302 475 5738

2% 6 -12 -4 -4 0 -9 11 6

ηa ηa ηa ηa

303 132 403 1410 708 1357 na 7040

— 0 7

1

4 -2 -10

— -7 -6 6 -12 2 -9

—

-1

a Manufacturers sales b Frc>m petroleum refining only Sources: Government agencies for each country 74

June 9. 1986 C&EN

Millions of lb

U.K Sulfuric acid Hydrochloric acid*' Phosphoric acid Chlorine Benzene Ethylene Propylene Butadiene Acetone Formaldehyde Phenol Polyethylene Polypropylene Polyvinyl chloride Synthetic rubber WEST GERMANY Sulfuric acid Hydrochloric acid Nitric acid Chlorine Sodium hydroxide Sodium carbonate Sodium sulfate Ammonia Benzene Toluene Xylenes Ethylene Propylene Butadiene Ethylene oxide Ethylene glycol Propylene glycol n-Butanol Acetaldehyde Acetic acid Ethanol Formaldehyde Methanol Phthalic anhydride Polyethylene Polyvinyl chloride Synthetic rubber Nitrogen fertilizers (N) Phosphate fertilizers (P 2 0 5 )

1985

1984

1983

1982

5556 337 826 2269 1837 3182 2141 655 323 272 259 999 592 389 593

5829 345 896 2156 1660 2913 2147 570 355 228 406 893 568 379 635

5692 286 981 1980 1597 2540 1719 523 268 226 315 896 506 420 571

5692 260 897 1935 1253 2454 1695 503 298 236 308 937 487 387 537

7371 2079 6361 7686 7581 3096 306 5036 2723 b 860 1089 6661 3665 1851 1073 504 371 604 726 655 170 1253 1302 378 2725 2658 1007 1826

8002 2104 6284 7536 7408 3000 281 5183 2734 b 816 1003 7093 3969 1661 1044 509 372 589 737 668 120 1283 1504 453 2882 2490 988 1843

8009 1980 5778 6900 6830 2679 275 4495 2939 691 1127 6980 3793 1580 993 450 351 562 647 590 171 1175 1470 429 2996 2398 951 1642

8334 1865 5040 6253 6318 2432 472 4145 2258 590 1012 5808 3259 1275 866 404 279 508 571 562 220 1070 1559 439 2473 1902 888 1464

394

473

552

595

Change 1984-85

-5% -2 -8 5 11

9 0 15 -9 19 -36 12 4 3 -7 -8% -1 -1

2 2 3 9 -3 0 5 9 -6 -8 11 3 -1

0 3 -1 -2 42 -2 -13 -17 -5 7 2 -1

-17

Look what happerai when you combine silicatè^chemistry with an active imagination