US chemical industry is in for a brutal 2020

The COVID-19 pandemic has pushed the US and world economies into the worst recession in decades, and the US chemical industry will see a sharp decline before rebounding next year, according to the an updated outlook from the American Chemistry Council (ACC).

The trade association’s baseline prediction is for a 9.3% decline in US chemical production volume this year. Its pessimistic outlook, in which COVID-19 cases start spiking again, is for a 14.7% production decline, and its optimistic scenario, where the economy benefits from a V-shaped recovery, is for a 7.0% decline.

The US industry, the ACC predicts, will cut about 20,000 jobs this year, a decline of 3.6%. Capital spending, as companies tighten their belts and delay projects, will decline about 17.6%, to $29 billion.

This is a far cry from the ACC’s prediction in December that US production will increase by 0.4% this year. “COVID-19 has obviously changed that,” says Martha Moore, senior director of policy analysis and economics. “It has spread to every corner. And the government-imposed lockdowns have caused just this collapse in economic activity. It’s the deepest recession we have seen since the 1930s.”