Los Angeles, CA (PRWEB) July 25, 2013
The Inorganic Chemical Manufacturing industry exhibited volatile growth over the past five years. Throughout the recession, demand from the construction sector deteriorated and remained persistently low. On the other hand, downstream customers like the alumina and paper manufacturing industries recovered quickly after the recession, stimulating demand for this industry's products. According to IBISWorld Industry analyst Radia Amari, “the weakened dollar also fueled export growth over the past five years”. In the five years to 2013, IBISWorld expects revenue to increase an average 1.1% per year to $37.3 billion. In 2013, revenue is expected to grow 1.9% as the economy recovers. In 2009, demand from manufacturing fell as the economy collapsed. Consequently, industry revenue fell during that year also. The manufacturing sector recovered in 2010, boosting demand for inorganic chemicals. Additionally, the trade-weighted index remained significantly below prerecession levels over the past five years, making domestically manufactured chemicals relatively cheaper in comparison to internationally manufactured chemicals. As a result, exports have grown since 2008. Chemical manufacturing is energy-intensive, as such this industry benefited from relatively slow electricity price growth. The natural gas boom also benefited industry operators, as domestic natural gas prices plummeted even as world natural gas prices grew. As a result, profitability strengthened over the past five years. Nevertheless, firms consolidated to improve operating efficiency.
In the five years to 2018, the industry will expand, led by improved demand for chlorine and carbon black. Carbon black is used in tire and rubber manufacturing, which will grow strongly over the next five years with the automobile sector's recovery. Chlorine is used in nearly all manufacturing industries, especially in other chemical manufacturing industries. “Demand for chemical manufacturing is anticipated to strongly increase from 2013 to 2018, fueling revenue growth”, says Amari. Furthermore, despite an increasing trade-weighted index, exports will continue to grow strongly, similar to the previous five years. The recovering global economy will demand more chemicals for manufacturing and construction.
In 2013, the Inorganic Chemical Manufacturing industry exhibits a low level of market share concentration. Typically, industry firms specialize in a few specific products, limiting the overall market share each firm can control. During the recession, some firms consolidated to increase production capacity and improve operating efficiency. Firms have also merged to jointly pursue new technology and products, such as more energy efficient machinery and chemicals. Also, firms previously experiencing stagnation due to high energy costs have been given new life due to low natural gas prices in the United States. Falling natural gas prices boosted the profitability of many firms, making them more attractive acquisition targets. As a result, market share concentration has steadily increased over the past five years. The largest companies in the industry are E. I. du Pont de Nemours, and the Dow Chemical Company.
For more information, visit IBISWorld’s Inorganic Chemical Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures a variety of basic inorganic chemicals. Inorganic chemicals are generally mineral-based. Most organic chemicals, on the other hand, are carbon-based. Inorganic chemicals are used as inputs in a number of manufacturing and industrial processes. Key identifiable industry segments include chlor-alkali and carbon black 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
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