Chemistry is essential to our everyday lives and the economy. The business of chemistry transforms the natural raw materials of the earth, sea and air into products that we use everyday; it also drives innovation and creates jobs and economic growth by creating products that bring major societal benefits to quality of life, health, productivity, convenience and safety.
The science and materials of chemistry make the lives of Americans and others throughout the world healthier, safer, and more sustainable and more productive. Indeed, our food, safe water supply, clothing, shelter, health care, computer technology, clean energy sources, transportation and every other facet of modern life, all depend upon the business of chemistry.
Not only is the business of chemistry essential to the economy for the jobs it generates through its business activities, it is essential to the economy through its products. More than $700 billion of chemistry products flow through the economy each year. The products of chemistry are present in some form in nearly every facet of the American economy. In fact, over 96 percent of all manufactured goods are directly touched by chemistry. Industries consume products made by other industries that have large chemical inputs, i.e., plastics, rubber, synthetic textiles, and components using these materials. A significant amount of the chemistry use in many products comes from packaging. Chemistry is also essential to the American standard of living.
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Chemistry is essential to our economy and plays a vital role in the creation of ground-breaking products that make our lives and our world healthier, safer, more sustainable and more productive. The business of chemistry provides 784,000 skilled, good-paying American jobs. The business of chemistry supports nearly 25% of the U.S. GDP and accounts for 12% of U.S. exports, $188 billion in 2012, and is the second largest exporting sector in the U.S.
The economic contributions of the chemical industry are numerous, though often overlooked in traditional analyses that consider only the direct jobs and output of the industry. In addition to the jobs created directly by the industry, additional jobs are supported by the purchases of the chemical industry and by the subsequent expenditure-induced activity. The chemical industry paid its employees wages and salaries and purchased supplies and services (including transportation, contract workers, warehousing, maintenance, accounting, etc.). These supplier businesses, in turn, made purchases and paid their employees, thus generating several rounds of economic spending and re-spending generated by the chemical industry.
Most production of basic chemicals is concentrated along the Gulf Coast, where petroleum and natural gas feedstocks are available in refineries. Texas and Louisiana produce a majority of all primary petrochemicals. Production of other products, such as plastics, pharmaceuticals, and fertilizers is more widely dispersed among the states.
The U.S. chemicals industry's end-use energy consumption (excluding electricity generation, transmission, and distribution losses) totaled almost 5.2 quadrillion Btu in 2006; accounting for about 24% of all energy use in U.S. manufacturing.4 According to the American Chemistry Council, the industry has reduced energy consumption by more than half since 1974.
Pharmaceuticals include prescription and over-the-counter drugs; in-vitro and other diagnostic substances, vaccines; serums, plasmas and other biological products; and vitamins and other pharmaceutical preparations for both human and veterinary use.
Basic chemicals include inorganic chemicals, bulk petrochemicals, organic chemical intermediates, plastic resins, synthetic rubber, man-made fibers, dyes and pigments, printing inks, etc. Also called commodity chemicals, these chemicals are produced in large volumes.
Specialty chemicals are low-volume, high-value compounds sold on the basis of what they do, not what they are. Also known as performance chemicals, some examples include paint, adhesives, electronic chemicals, water management chemicals, oilfield chemicals, flavors & fragrances, rubber processing additives, paper additives, industrial cleaners, and fine chemicals.
Agricultural chemicals include fertilizers and crop protection chemicals, i.e., pesticides.
Consumer products include soap, detergents, bleaches, laundry aids, toothpaste and other oral hygiene products, shampoos and other hair care products, skin care products, cosmetics, deodorants and other body care products, and perfume and cologne, among others.
The chemicals industry is a keystone of the U.S. economy, converting raw materials (oil, natural gas, air, water, metals, minerals) into more than 70,000 different products. Chemicals are used to make a wide variety of consumer goods as well as thousands of products that are essential inputs to agriculture, manufacturing, computing, telecommunications, construction, and service industries.
The business of chemistry has consistently been one of the largest U.S. private-sector investors in new plants and equipment (P&E), as new products and processes resulting from R&D are brought into reality. Profit margins (and operating profits) and capacity utilization rates are drivers for P&E investment.
During much of the post-World War II period, real (that is, adjusted for the effects of inflation) capital investment in structures (or plants) and equipment by the business of chemistry paralleled overall U.S. economic activity. Investment rose during periods of business expansion and fell during periods of economic downturns. Overall, however, annual capital investment in the business of chemistry has experienced sustained long-term growth
American Chemistry Council, https://www.americanchemistry.com/Growth-Overview/
Bureau of Economic Analysis, "GDP by Industry and Input-Output," U.S. Department of Commerce.
Energy Information Administration, "Manufacturing Energy Consumption Survey 2006," U.S. Department of Energy. www.energy.gov