The chemical industry is also bracing for a tough economic climate. “Somebody hit a giant pause button,” says Ron McElhaney Jr., owner of Management Recruiters of Savannah, which recruits for the specialty chemical job market. “Over the last 3 months, my business has cratered. Nobody is hiring anybody.” But McElhaney is optimistic that when the pandemic gets under control, hiring will come “roaring back.”
Others are not so sure. “It’s going to be several years before we come out the other side,” economist Hodges says. “And when we come out, we’ll be coming out in a completely different place from where we went in. There’s no business as usual here.” To survive, he says, businesses will need to focus on potential new opportunities that will develop.
Hodges predicts the petrochemical sector will be hit hard by the economic recession. “If you’re looking at ethylene and polyethylene, they are just a disaster area, and they’re not going to get any better,” Hodges says, noting that it’s just a matter of time before layoffs and hiring freezes hit these areas. “Inevitably, some companies are going to go bankrupt because the market is not there anymore,” he says.
Recent data on chemical industry output are sobering. According to the American Chemistry Council, a trade group, US chemical output is estimated to fall by around 3.3% in 2020 if shutdowns are lifted before the end of June, and output could drop by 6.5% if shutdowns last through the fourth quarter. Job losses could total 28,000, or 5.1% of the workforce, in 2020. Some chemical companies have announced hiring freezes. Huntsman, for example, announced in its first-quarter earnings call on May 1 that it is implementing a company-wide hiring freeze and suspending 2020 salary increases.
One area of employment that is likely to remain strong is in the pharmaceutical industry.
In fact, many pharma companies C&EN spoke with said they are continuing to recruit. Jeffrey Sperry, associate director of process chemistry at Vertex Pharmaceuticals, says Vertex has 300 open positions. “We’re hiring new PhDs, we’re hiring new bachelor’s and new master’s candidates, we’re hiring across the entire spectrum,” Sperry says. The company is conducting interviews virtually.It will be really interesting to see what hiring looks like in the fall. It doesn't look like the economic outlook is going to get better any time soon, so it will be interesting to see what both the chemical firms and the pharma firms will end up doing as their profitability in 2020 and 2021 becomes more clear. I don't predict mass layoffs, but I think it's safe to predict a slower market for both early- and mid-career industrial chemists.
Readers, what do you think?
*full disclosure: Linda Wang is the editor for my column.