INDUSTRY’S OUTLOOK WORSENS DOWNTURN: Main industry trade group drops its forecast for 2009 chemical output
T
HE AMERICAN Chemistry Council projects that
U.S. chemical output, excluding pharmaceuticals, will drop 8.7% this year from 2008 levels. The forecast represents a dramatic lowering of the trade association’s projections from December 2008, when it estimated only a 3.1% decline. In a double whammy of bad news, this year’s slowdown in output will come on top of a downwardrevised figure for output in 2008. T. Kevin Swift, chief economist at ACC, reports that 2008 production shrank 6.3%, about double his December estimate. Even pharmaceuticals will venture into negative territory, according to Swift, although it is still the strongest chemical segment. He projects a small 0.7% output decline this year, compared with a 0.7% increase in 2008. Basic chemicals output will be the hardest hit, with a projected decline of 12.5% in 2009. Swift says the updated figures reflect the same trends that he identified late last year but that the magnitude of the slowdown is greater than economists anticipated. “With a worsening economic environment, final demand has dropped, and customers continue to reduce their inventories,” he says. The U.S. Commerce Department’s Bureau of Economic Analysis is also reducing its estimate of economic activity. BEA now says the fourth-quarter gross domestic product (GDP) plummeted an eye-popping 6.2%, compared with its initial estimate of 3.8%. Ed Friedman, senior economist at Moody’s Economy. com, says the economy has been especially hard to pre-
STEEP DECLINES
ACC’s most recent projections for 2009 dict. “As the yearlong U.S. chemical output are grim financial crisis accelerated in the fall, banks ANNUAL CHANGE froze up completely, 2008 2009 2010 2011 and that also froze up a All chemicals -3.5% -5.7% 2.1% 2.2% Pharmaceuticals 0.7 -0.7 2.3 2.0 lot of business,” he says. Chemicals, excluding -6.3 -8.7 1.9 2.4 Another confounding pharmaceuticals factor, according to Agricultural chemicals 1.0 -5.5 0.6 3.2 Friedman, is the large Basic chemicals -8.9 -12.5 2.4 2.3 decline in exports, one Specialty chemicals -3.4 -4.8 1.4 2.3 of the last parts of the Consumer products -5.3 -3.6 1.3 1.7 economy to be reflected SOURCE: American Chemistry Council in government data. Projections for the first quarter of 2009 do not show an improvement, Friedman reports. “GDP will move largely downward. The main factor is the large employment losses of 500,000 to 600,000 jobs per month,” he says. ACC’s Swift does anticipate a light at the end of the tunnel later in the year due in part to spending from the federal stimulus package. “The massive stimulus being injected into the U.S. and other world economies will foster demand, and a virtuous cycle of recovery will engage,” he says. DuPont is already ramped up to take advantage of a boost in infrastructure spending. The company anticipates that many of its products, including Kevlar and specialty resins, will be used in “shovel ready” bridge and highway projects. “We are recognized as the leader in those segments,” spokesman Anthony Farina says. DuPont will also benefit from spending on renewable energy because “you can’t have a solar panel without a DuPont material,” he adds. Quantifying the anticipated stimulus impact is difficult, but ACC points out that every $1,000 spent on nonresidential construction yields an estimated $160 to $230 in chemical sales. Spending on green energy projects, such as wind turbines and solar cells, could boost chemical demand by an even higher amount, according to ACC.—MELODY VOITH
RECOGNITION National Science Board to honor ACS program, Roald Hoffmann
LEO SOREL
ACS’s Project SEED and Nobel Laureate Roald Hoffmann will receive National Science Board (NSB) Public Service Awards
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Cecilia Marzabadi (third from left), associate professor of chemistry, in the lab with students from Project SEED at Seton Hall University, in South Orange, N.J.
at ceremonies in Washington, D.C., in May. The awards recognize individuals and organizations for significant contributions to increasing public understanding of science and engineering. Project SEED promotes science careers by providing economically disadvantaged high school students with summer research experiences in chemistry laboratories under the supervision of volunteer mentors. More than 9,000 Project SEED students have participated since 1968. “ACS is honored and thrilled to be recognized for Project SEED,” says Madeleine Jacobs, ACS executive director and CEO. “Many of these students have gone on to
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become scientists, but even those who did not have developed self-confidence and discovered new abilities that have enabled them to be successful in their lives.” In a press release, NSB Chairman Steven C. Beering commends Hoffmann for “reaching out broadly to both the public and the scientific community to emphasize the essential role of chemistry in the world.” “The award means a lot to me, for it recognizes everything I have been trying to do, in chemistry and outside, reaching out in the broadest way. I put it that way because I try not to separate my worlds,” Hoffmann says.—LINDA RABER
