Friday, December 9, 2022

ACC: US to have a "shallow recession"

Via C&EN, this news from the chief economist of the American Chemistry Council, Martha Gilchrist Moore (article by Alex Tullo): 
The US economy will experience a “shallow recession” early next year, contributing to a slump for the nation’s chemical sector, according to a forecast from the American Chemistry Council (ACC), an industry trade group.

US chemical production rebounded strongly in 2022 from the depths of the pandemic, expanding by 3.9%. “Following several years of really weak growth, we’ve actually had one of the better years of the past decade,” Martha Gilchrist Moore, the ACC’s chief economist, told reporters on a Dec. 7 conference call.

Consumer spending, Moore said, was strong as people spent some of the savings they had squirreled away during the pandemic. And supply chain disruptions eased after weighing on the industry in 2021.

Chemical trade was also strong. US exports are on track to rise 20.4% to $184 billion this year. Because of relatively inexpensive natural gas, the US remains a globally competitive venue for making chemicals. And, Moore noted, exports got a lift from shipments of natural gas-intensive chemicals, such as fertilizers, to Europe in particular. That region is facing an energy crisis stemming from Russia’s invasion of Ukraine, and many European chemical makers had to cut production.

But the ACC says the US chemical boom will subside in 2023, when it expects production to decrease by 1.2%.

“We’re seeing recessionary conditions start to take hold,” Moore said. “Decades-high inflation is really underlying all of this.” It has eroded household purchasing power and has prompted interest rate hikes by the Federal Reserve that will dampen economic growth.

I don't think this will impact industry hiring too much, but it strikes me that it will have some kind of impact (i.e. Dow/DuPont/the other chemical industry majors hiring a touch fewer chemists in 2023/24 than in 21/22, but we shall see.) This will be important to watch, especially if the other sectors of the chemistry employment world start contracting their workforces as wel... 

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