Chemical Spotlight

The Chemical Industry in the United States
 

Overview

The chemical industry is one of the United States' largest manufacturing industries, serving both a sizable domestic market and an expanding global market. It is also one of the top exporting sectors of U.S. manufacturing. Accounting for almost 15 percent of global chemical shipments, the United States is a world leader in chemical production and exports.

The industry's more-than 10,000 firms produce 70,000+ products. In 2016, the U.S. chemical industry had final sales exceeding $800 billion and directly employed more than 811,000 workers, with additional indirect employment by industry suppliers of more than 2.7 million. Total FDI in the industry passed $700 billion in 2017. With investments of $91 billion in research and development in 2016, and a record of strong enforcement of intellectual property rights, the chemical industry accounts for a significant portion of patents granted in the United States. 

Strong product identification and quality, access to low-cost natural gas, a highly educated workforce, world class research centers, protection for intellectual property, and a robust regulatory system make the United States a competitive home for chemical firms from across the globe.

Industry Subsectors

Basic Chemicals: These include organic and inorganic chemicals, plastic resins, dyes and pigments. Plastic resins, in particular, have experienced significant growth as a replacement for traditional materials in the automotive, construction, and packaging end-use markets.

Specialty Chemicals: These include adhesives and sealants, water treatment chemicals, plastic additives, catalysts and coatings. These chemicals are performance-oriented and typically include customer/technical servicing as an aspect of their sales.

Agricultural Chemicals: These play a crucial role in the farm economy and the food processing sector. Thanks to modern agriculture, farmers have doubled the production of world food supplies since 1960, tripled the output of foods like cooking oils and meats, and increased per capita food supplies in the developing world by 25 percent.

Pharmaceuticals: These include diagnostics, prescription drugs, vaccines, vitamins, and over-the-counter drugs for human and veterinary applications. This subsector also includes biotechnology products.  Strategic investment in companies, facilities, and research and development is especially important for this subsector.

Consumer Products: These include soaps, detergents, and cleaners, as well as toiletries and cosmetics. While consumer products are an established segment of the industry, technological innovation and product development are important due to short product life cycles.

Federal Programs & Legislation

Manufacturing USA: Manufacturing USA – the National Network for Manufacturing Innovation - consists of linked manufacturing innovation institutes with common goals, but unique concentrations. Each institute is designed to be a public-private membership organization where industry, academia, and government partners are leveraging existing resources, collaborating, and co-investing to nurture manufacturing innovation and accelerate commercialization. In the chemicals area, the Institute for Advanced Composites Manufacturing Innovation (IACMI) was created in 2015 with membership from industry, academia, and the public sector. The IACMI will foster the creation and application of next-generation composites by accelerating the development and adoption of advanced manufacturing technologies in the industry with a focus on vehicles, wind turbines, and compressed gas storage.

Manufacturing Extension Partnership: The Manufacturing Extension Partnership (MEP) helps U.S. firms by providing individually tailored services to help companies improve their productivity, economic competitiveness and technological capabilities. The program leverages money and resources in a cooperative effort with the federal government, state and local authorities, and the private sector. The MEP generates approximately $18 in new sales growth for manufacturers for every federal dollar invested.

Department of Energy’s Advanced Manufacturing Office: Through cost-shared projects, tools, training, and information, the Advanced Manufacturing Office (AMO) works with a broad spectrum of public-private partners to develop and commercialize technologies/materials and practices that will result in increased energy productivity and savings for U.S. industry.  Two of the AMOs research and development projects have chemical-related initiatives:  the Innovative Process and Materials Technologies Project and the Next Generation Materials Project.

Department of Agriculture’s Rural Business and Cooperative Service (RBSC): Among the Business Programs of the RBSC is the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (BAP or Section 9003 Program).  The BAP provides loan guarantees to assist in the development of manufacturing facilities for advanced biofuels, renewable chemicals and biobased chemical products

Prepared in collaboration with the International Trade Administration's Industry & Analysis Unit (I&A)

Emblem of the International Trade Administration

Industry & Analysis (I&A) staff of industry, trade and economic analysts devise and implement international trade and investment strategies to strengthen the global competitiveness of U.S. industries. By combining in-depth analysis with the International Trade Administration’s industry relationships, I&A devises initiatives to unlock export and investment opportunities for U.S. businesses, represent the interests of U.S. industry in trade negotiations, and publishes research on global opportunities for U.S. companies.