NEW YORK — The US chemical sector is “in a good place” following its annual report on Thursday, according to the Chemical Industry Digest, an industry publication.
The annual report said U.S. chemicals production and demand are expected to rise 5% in 2018 and 6.5% in 2019, while the industry expects a 9% increase in 2018.
In 2018, the Chemical Manufacturers Association said its “industry is on the right track” with an overall 7.5 percent increase in output.
For 2019, however, the association said it is “more optimistic than ever” that the sector will be able to grow by a similar rate, with the goal of 3% annual growth by 2021.
But it cautioned that “there is still room for improvement” in terms of how the sector can meet demand.
Despite strong demand, chemical companies have a difficult time meeting demand for their products, according the report.
“While the sector is on track to reach its full potential in 2020, it is also vulnerable to supply chain and regulatory uncertainty,” it said.
A major challenge is “the need to manage the volume of chemicals needed to meet market demands,” according to a press release from the Chemical Manufacturing Association.
On top of the challenge, chemical manufacturers also have to deal with “the fact that consumers have grown skeptical about their product’s safety and the perceived dangers associated with its use,” the release said.
Chemical manufacturers “have been able to manage this challenge by making it easier for consumers to purchase products and by making the chemicals available for use as a supplement,” it added.
More from the chemical industry:The chemical industry is “growing at a rate of 3.6% annually,” according the Chemical Manufacturer’s Association.
That compares to an annual growth rate of 2.8% in 2017.
This year, chemical producers saw a 12% increase, while total exports increased 3% to $5.5 billion, according a ChemChina report.
The chemical sector accounts for more than 40% of global output, and the industry’s total economic impact is expected to grow from $4.4 trillion in 2018 to $7.1 trillion in 2021, according ChemChina.
However, it said the sector’s growth is “not as strong as some would have hoped.”