Exports grew strongly due to increasing demand from emerging economies
Los Angeles, CA (PRWEB) December 18, 2013
The Organic Chemical Manufacturing in Canada industry experienced moderate growth over the past five years, overcoming a drop in demand during the recession. Many industrial and consumer products such as dye, detergent, ethanol and soap, use organic chemicals as input materials. As such, the manufacturing sector requires a consistent supply of organic chemicals, resulting in stable demand for the industry. However, in 2009, the manufacturing sector contracted 18.7% and industry revenue subsequently fell 15.8%. Since then, industry operators have recovered as economic growth resumed. Given that consumer products such as soap and detergent are necessities, demand quickly rebounded to precession levels. IBISWorld thus expects industry revenue to increase at an annualized rate of 2.1% to $3.7 billion, over the five years to 2013. Additionally, manufacturing output growth is anticipated to slow to 0.3% in 2013, partly due to concerns regarding a potential housing bubble, while industry revenue is anticipated to increase only 1.1% over the year.
The chemicals sector is highly globalized and dependent on trade. According to IBISWorld Industry Analyst David Yang, “Over the past five years, exports have grown strongly because emerging economies demanded more consumer staples, causing manufacturers to purchase additional chemical inputs.” Industry operators also benefited from trade with the United States, the largest export market of the industry. The United States has a large number of consumer and industrial product manufacturers, providing a stable market for industry companies.
Industry profitability is anticipated to slightly increase in the five years to 2013, buoyed by favourable crude oil prices in North America. “The shale oil boom kept domestic crude oil prices low, thereby lowering purchase costs for chemical manufacturers,” says Yang. Additionally, industry operators slowly consolidated operations to bolster efficiency. Consequently, IBISWorld estimates that number of establishments contracted over the past five years.
Over the next five years, the industry will experience more robust growth, as industrial output expands. Development will be driven by rising consumer demand for products like soap, detergent and dyes, especially from customers in emerging economies. Strong growth in the United States will also translate into greater demand for industry exports. As a result, IBISWorld forecasts that industry revenue will increase in the five years to 2018.
For more information, visit IBISWorld’s Organic Chemical Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in the Organic Chemical Manufacturing industry manufacture basic organic chemicals (excluding petrochemicals), industrial gases and synthetic dyes and pigments. Key product groups include gum and wood products, cyclic crudes and intermediates, and ethyl alcohol, along with other basic organic chemicals. These products are predominantly intermediates that are used as raw material inputs by other manufacturing industries in the production of downstream products.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.