ACC predicts a "moderate recovery" in the chemicals industry in 2024
Source: PUWORLD 
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November 30, 2023, 1:37 PM
The American Chemistry Council (ACC) said in its latest outlook report that it expects U.S. economic growth to slow in the coming year. The report said: "The momentum driving U.S. economic growth in 2023 begins to fade. Despite strong U.S. GDP growth in the third quarter, U.S. economic growth is slowing. After a year and a half of interest rates, inflation and the labor market are cooling."
The report said that although consumer spending showed surprisingly resilience in 2023, pressures from high prices and borrowing costs began to have an impact, and reductions in savings during the epidemic also began to exacerbate consumer spending. "Following consumer spending growth of 2.2% in 2023, we expect growth to slow to 1.0% in 2024," the ACC said.
On the business front, investment grew by 4.1% in 2023, but investment growth is expected to slow to 0.6% in 2024 given rising borrowing costs, tightening loan standards and falling consumer spending.
Elsewhere in the world, higher interest rates are slowing economic growth, although conditions have improved in parts of Asia. However, world demand remains weak due to reduced inventories accumulated in response to supply chain disruptions.
In 2023, overall industrial production will only grow by 0.3%, and growth is expected to be flat by 2023. However, the automotive and aerospace fields, which are important applications of polyurethane, performed well.
ACC said that as the end of 2023 approaches, the inventory destocking cycle has basically been resolved, but there are no signs of customers restocking. "Compared to 2022, we expect chemical production to fall by 1.0% in 2023, with production falling in all chemical sectors except consumer goods."
"In 2024, we expect a moderate recovery in all sectors, with overall chemical production growing by 1.5%. This is consistent with findings from the ACC's Economic Sentiment Index, which found that chemical companies believe overall business activity and key customer demand declined in the third quarter, but expect supply chains to improve over the next six months. We expect the chemicals industry to improve before the overall economy improves." Source: PUWORLD
The report said that although consumer spending showed surprisingly resilience in 2023, pressures from high prices and borrowing costs began to have an impact, and reductions in savings during the epidemic also began to exacerbate consumer spending. "Following consumer spending growth of 2.2% in 2023, we expect growth to slow to 1.0% in 2024," the ACC said.
On the business front, investment grew by 4.1% in 2023, but investment growth is expected to slow to 0.6% in 2024 given rising borrowing costs, tightening loan standards and falling consumer spending.
Elsewhere in the world, higher interest rates are slowing economic growth, although conditions have improved in parts of Asia. However, world demand remains weak due to reduced inventories accumulated in response to supply chain disruptions.
In 2023, overall industrial production will only grow by 0.3%, and growth is expected to be flat by 2023. However, the automotive and aerospace fields, which are important applications of polyurethane, performed well.
ACC said that as the end of 2023 approaches, the inventory destocking cycle has basically been resolved, but there are no signs of customers restocking. "Compared to 2022, we expect chemical production to fall by 1.0% in 2023, with production falling in all chemical sectors except consumer goods."
"In 2024, we expect a moderate recovery in all sectors, with overall chemical production growing by 1.5%. This is consistent with findings from the ACC's Economic Sentiment Index, which found that chemical companies believe overall business activity and key customer demand declined in the third quarter, but expect supply chains to improve over the next six months. We expect the chemicals industry to improve before the overall economy improves." Source: PUWORLD