P. 1


# OAR Box 

# 1872 Prepped by Keeia Richards



## Document

Number: 

# 33 ) 11-1-8 2 Docket Number: 

# A-90-1 9

Printed 11/26/20088:51:50AM

Sheet 33 of 204P. 2 

# A-90-1 9 II-I-8 2 

# 199 0 US . 

# Industria l 

# Outloo k Prospect s fo rOve r35 0 Manufacturin g an d Servic e Industrie s

U.S . Departmen t o

f Commerc e Rober t A
. Mosbacher , Secretar y Thomas J
. Murrin , Deput y Secretar

y
J
. Michae l Farre n Unde rSecretar

y fo rInternationa l Affairs Roge rW
. Wallace Deput y Unde rSecretar

y fo rInternationa l Affairs Michae l P
. Skarzynsk i Assistan t Secretar

y fo rTrad e Developmen t

3 '



### Januar y 199 0



## ISB N 0-934213-10- 0P. 3
$0.2 0 abarre l les s tha n th e averag e fo r ayea r earlier . Th e wellhea dpric e o f domesti c crud e i s expecte dt o decreas e b y abou t th e sam e amount . Stil

l lowe r price s couldoccu

r i f OPE C member s d o no t

satisfactorily resolv e variou s quot aissue s o r i f the y increas e 199 0 quota s beyon dth e level s tha t existe d durin g th e las t

quarte r o f 1989 . U.S . petroleu mconsumptio n i s expecte dt o b e abou t 17. 4 millio n barrel s ada

y i n 1990 , alevel onl y sightly highe r tha n i n 1989 , whic h i s consisten t wit h th e expecte dslow economi c growt h rat e (Tabl e 2) . Consumptio n of mos t of th e major petroleumproduct s (including gasoline , je t fuel , an ddistillat

e fue l oil ) wil l increas e b y small amounts . Th e principa l excep tio n i s consumptio n of

residual fuel oil , whic h will fall b y 9 percent , reflectin g adecreas e i n deman dfo r tha t fue l by both th e electri c utilit

y an dnonutility sector s (se e Chapte r 4) . Domestic crud e oi

l productio n i s expectedt o declin e in 1990 fo r th e fift h consecutiv e year . Th e declin e wil l b e t o abou t 7. 4 millio n barrel s aday , o r b y 3. 9 percen t

relativ e t o 198 9 (Table 3) . Th e continuin g decreas e i n productio n reflect s th e lo w level s o

f exploratio n an ddevelopment durin g th e pas t severa l year s a s aresul t

o f muc h lowe

r price s tha n i n th e 1980-8 5 period , price s which , whe n adjuste dfo r inflation , ar e amon g th e lowes t

sinc e th e earl y 1970 s (Table s 4-7) . A hig h degree o f pric e volatilit

y ha s als o contribute dt o th e decreas e in exploratio n an ddevelopment an dt o th e consequent

fall i n prove n reserve s (Table 8) . A s aresul t of th e decreas e i n production , petroleu mimport s ar e expecte dt o increas e t o 8. 2 million barrel s ada

y i n 1990 , o r

b y more tha n 4 percen t relativ e t o 198 9 (Table 9) . Natural Gas U.S . consumptio n o

f natura l ga s i s expecte dt o reac h 18. 7 trillio n cubi c fee

t i n 1990 , o r

1.7 percen t

more tha n ayea

r earlier , an dit s highes t

leve l sinc e 198 1 (Tabl e 2) . All sectors , excep t th e electri c utilit

y sector , ar e expecte dt o participat e i n th e increase , wit

h th e larges t

absolut e increas e occurrin g i n th e residential an dindustrial sectors . Th e residentia l increas e i s likely t o b e clos e t o 3 percent . Th e slow pac e o f economi c growt

h i s likel y t o limi t th e increas e in demandfro

m th e industrial secto r

t o les s tha n 2 percent . Stron g growt h i n hydroelectri c powe

r wil l caus e deman dfo

r natura l ga s by electri c utilitie s t o fal

l b y abou t

2 percent . Tabl e 4 : Refine r Acquisitio n Cos t o f Importe d an d Domesticall y Produce d Crud e Oil , 1972-9 0 Importe d Crud e U.S . Produced Crud e Yea r Price Inde x Pric

e Inde

x (S/bbl ) (1982-100 ) (S/bbl ) (1982-100 ) 197 2 3.2 2 9. 6 3.6 7 11. 8 197 3 4.0 8 12. 2 4.1 7 13. 4 197 4 12.5 2 37. 3 7.1 8 23. 0 197 5 13.9 3 41. 5 8.3 9 26. 9 197 6 13.4 8 40. 2 8.8 4 28. 3 197 7 14.5 3 43. 3 9.5 5 30.6 197 8 14.5 7 43. 4 10.6 1 34. 0 197 9 . < 21.6 7 64.6 14.2 7 45. 7 198 0 33.8 9 101. 0 24.2 3 77.6 198 1 .T . 37.0 5 110. 4 34.3 3 110. 0 198 2 33.5 5 100. 0 31.2 2 100. 0 198 3 29.3 0 87. 3 28.8 7 92. 5 198 4 28.8 8 86. 1 28.5 3 91. 4 198 5 26.9 9 80. 4 26.6 6 85. 4 198 6 14.0 0 41. 7 14.8 2 47. 5 198 7 18.1 3 54. 0 17.7 6 56. 9 198 8 14.6 4 43. 6 14.7 6 47. 3 1989 ' 17.7 0 52. 8 17.7 0 56. 7 1990 * 17.5 0 552. 2 17.5 0 56. 1 'Estimated . 'Forecast . SOURCE : Energ

y Informatio n Administration . Tabl e 5 : Wellhea d Price s o f Domestically . Produce d Crud e Oi l an d Natura l Gas , 1972-8 9 Yea r Crud e Oi l (S/bbl ) Natura l Ga s (S/thousan d cu . ft.) 1 197 2 3.3 9 0.1 9 197 3 3.8 9 0.2 2 197 4 6.8 7 0.3 0 197 5 7.6 7 0.4 4 197 6 8.1 9 0.5 8 197 7 8.5 7 0.7 9 197 8 9.0 0 0.9 1 197 9 12.6 4 1.1 8 198 0 21.5 9 1.5 9 198 1 31.7 7 1.9 8 198 2 28.5 2 2.4 6 198 3 26.1 9 2.5 9 198 4 25.8 8 2.6 6 198 5 24.0 9 2.5 1 198 6 12.5 1 1.9 4 198 7 15.4 0 1.6 7 198 8 12.5 7 1.6 9 198 9 15.72 * 17 8 'We t natura l ga

s prio r t o extractio n o

f natura l ga

s plan t liquids . *Crud e oi l price i s th e averag e fo r th e first 7 months . SOURCE : Energ

y Informatio n Administration . Tabl e 3 : Productio n o

f Energ y b

y Source , 1972-9 0 Natura l Ga

s Nuclea r Y Crud e Oil ' Plan t Liquid s Hydroelectri c Electri c TM (millio n bbl s Natura l Gas ' (millio n bbl s Coa l Powe r Powe r pe r day ) (trillio n cu . ft. ) pe r day ) (millio n shor

t tons ) (billio n kWh ) (billio n kWh ) 197 2 9.44 0 21.6 2 1.74 0 602. 5 272. 6 54. 1 197 3 9.20 8 21.7 3 1.73 8 598. 6 272. 1 83. 5 197 4 8.77 4 20.7 1 1.68 8 610. 0 301. 0 114. 0 197 5 8.37 5 19.2 4 1.63 3 654. 6 300. 0 172. 5 197 6 8.13 2 19.1 0 1.60 4 684. 9 283. 7 191. 1 197 7 8.24 5 19.1 6 1.61 8 697. 2 220. 5 250. 9 197 8 8.70 7 19.1 2 1.56 7 670. 2 280. 4 276. 4 197 9 8.55 2 19.6 6 1.58 4 781. 1 279. 8 255. 2 198 0 8.59 7 19.4 0 1.57 3 829. 7 276. 0 251. 1 198 1 8.57 2 19.1 8 1.60 9 823. 8 260. 7 272. 7 198 2 8.64 9 17.7 6 1.55 0 838. 1 309. 2 282. 8 198 3 8.68 8 16.0 3 1.55 9 782. 1 332. 1 293. 7 198 4 8.87 9 17.3 9 1.63 0 895. 9 321. 2 327. 6 198 5 8.97 1 16.3 8 1.60 9 883. 6 281. 1 383. 7 198 6 8.68 0 15.9 9 1.55 1 890. 3 290. 8 414. 0 198 7 8.34 9 16.5 4 1.59 5 918. 8 249. 7 455. 3 198 8 .. . 8.14 0 16.9 9 1.62 5 949. 8 222. 9 526. 9 1989 * 7.67 0 16.9 1 1.60 0 973. 0 270. 7 521. 1 1990 » 7.37 0 17^2 5 1JS2

0 987J ) 292J J 549. 6 'Include s leas

e condensate . 'Estimated . 'Dr y natura l gas . 'Forecast . Tota l productio n i s base d o n a narro

wdefinitio n o

f renewabl e energy . SOURCE : Energ y Informatio n Administration . 3- 4 U.S
. Industria l Outloo k 1990—Oi l an d Ga s Othe r (billio n kWh ) Tota l Energy 5 (quadrillio n Btu ) 1. 8 2.3 2.7 3. 4 3.9 4. 1 3. 3 4. 4 5. 5 6. 1 5. 2 6. 5 8. 6 10. 7 11. 5 12. 3 12. 0 11. 8 12. 7 62.4 2

62.0 6 60.8 4 59.8 6 59.8 9 60.2 2 61.1 0 63.8 0 64.7 6 64.4 2 63.9 0 61.2 1 65.8 5 64.7 7 64.2 3 64.8 2 66.0 0 65.7 9 66.4 0P. 4
Trend s an d Forecasts : Man-Mad e Fiber s (SI C 2823,2824 ) (i n millions o f dollar s excep t as noted ) Percen t Chang e t C m 1987 ] 1988 J 1989 3 1987-8 8 1988-8 9 Industr y Oat a Valu e o f shipments 4 11,44 4 12,41 1 13,48 6 8. 4 8. 7 Valu e o f shipment s (1987$ ) 11,44 4 11,71 6 12,01 0 2. 4 2. 5 Tota l employmen t (000 ) 56. 3 58. 4 60. 8 3. 7 4. 1 Productio n worker s (000 ) 42. 4 44. 4 46. 4 4. 7 4. 5 Averag e hourl y earning s ($ ) 12.3 5 12.4 7 12.6 1 1. 0 1. 1

Produc t Data Valu e o f shipments 5 10,10 0 10,92 3 11,85 8 8. 1 8. 6 Valu e o f shipment s (1987$ ) 10,10 0 10,34 4 10,54 7 2. 4 2. 0

Trad e Oata Valu e o f import s 42 4 47 2 52 2 11. 3 10. 6 Valu e o f export s 1^070 V36 1 170 1 27 J 25J ) 'Industry an d product dat a ar e preliminary
. Trad e dat a ar e adjuste d t o confor m t o th e 1987 SIC
. 'Valu e o f product s classifie d i n th e man-mad e fiber s industry produce d b y al l industries
. 'Estimated , excep t fo rexport s an d imports
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e Estimated
. Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. 'Valu e o f al l product s an d service s sol d b y establishment s i n th e man-mad e fiber s industry
. historicall y hig h levels . Corporat e earning s wer e u p fo r mos t majo r man-made fibe

r producers . In 198 9 man-mad e fiber s accounte dfo

r over 6 0 percen t

o f tota l fiber s consume di n th e productio n o

f textile s products . Th e U.S . man-made fibe

r industr y consist s o

f les s tha n on e doze n horizontally integrated , larg e multinationa l corporation s whic h accoun t

fo r abou t 9 0 percen t

o f U.S . production . Pro

ductio n capacit

y in th e U.S . ha s been reduce di n recen t years . On agloba

l basis , however , th e growt h o f man-mad e fibe

r productio n in th e mid-1980' s i s primaril y in th e developin g worl dan di s increasin g a t

asubstantial rate . Fro m1984 t o 198 8 productio n increase dove r 5 0 percent

i n Chin aan dothe r j\sia n countries . Withi n th e sam e time period , share o

f worl d productio n droppe din th e U.S. , Europ e an dJapa n whil e th e developin g worl dexpande dit s share significantly . Thi s tren d i s expecte dt o continu e a s developing nation s see k t o increas e thei r technical capabilitie s i n thi s area . Cellulosics Cellulosi c fibe

r productio n ha s been o n th e declin e fo r severa l years . Squeeze

db y th e industria

l enduse s o

f synthetic s an dth e attractio n o

f cotto n fo r apparel , cellulosi c manufac

turer s foun dth e marke t

fo r thei r product s severely reduced . However , rayo n an dothe r cellulosi c fiber s turne du p in 198 9 a s deman dfo

r blende drayo n fo

r appare l ros e substantially . Shipment s o

f rayo n increase d2. 6 percent , t o 67 2 millio n pounds . Thi s continue dperformanc e o f rayo n fiber

i s attribute dt o risin g deman dfo r rayo n apparel . Other

en duse s fo r rayo n includ e home furnishing s suc h a s draperies , tablecloths , an dupholster

y an dindustrial product s suc h a s nonwove n fabrics , an dmedica l products . Non-Cellulosic Fibers Th e polyester

stapl e fiber

an dfilament

yarn marke t shipment s in 198 9 reache d3. 7 billion pounds . Capacit y utiliza

tio n rate s fo

r polyeste r filament wer e at recor dheights . In th e Unite dState s polyester

account s fo

r mor e tha n 3 0 percen t o f al l fibers consume dannually . I n recent year s j\merica n fiber manufacturer s significantly reduce dcapacit y t o produc e polyeste r thereb y inhibitin g thei r

abilit y t o mee t thi s unfore

see n upturn i n demand . Nylo n productio n continue dt o registe r gain s in 198 9 accountin g fo

r 3 0 percen t

o f tota l man-made fiber

produc

tion . Nylo n i s th e chie

f beneficiar

y o f stron g deman dfo

r carpeting , a s i t

account s fo

r ove r 5 0 percen t o f al l carpe t yar n consumed . Nylo n i s als o th e idea l fiber fo r application s tha t require th e fabri c t o withstan dan drecove r fro mhig h stress , suc h a s parachutes , rugge doutdoo r equipment

an douter wear. —Peter

Leigh, Office of

Textiles and

Apparel, (202) 377-4058, September

1989.
Additiona l Reference s Carpet and Rug Industry, Rodma n Publications , PO . Box 555 , Ramsey , NJ . Th e Workin g Papers o f

th e MI T Commissio n o n Industrial Productivity , Massachusett s Institut e o f

Technology , 1989 , 5 5 Haywar d Street , Cam bridge , M A 0214 2 Textile Hi-Lights. Economi c Informatio n Division , American Textile Manufac turers Institute , 180 1 KStreet , NW , Suit e 900 , Washington , D.C . 2000 6 Textile Organon, Textil e Economic s Bureau , Int , 10 1 Eisenhowe rParkway , Roseland , N J 0706 8 Textile World. McGraw-Hil l Publication s Ca , 122 1 Avenu e o f th e Americas , Ne w York, N.Y . 1002 0

U.S . Industria l Outloo k

1990—Textil

e Mil l Product

s 

## 9- 7P. 5



# 1 2 Chemical s an d Allie d Product s

The value of

chemicals and

allied products industry shipments is expected

to increase 1.7

percent in 1990. The largest increases will

occur for surface active agents, adhesives and sealants, pharmaceutical preparations, and

phosphatic

fertilizers. Both exports and imports will

grow, but

at rates significantly lower

than in recent

years. 

# T h e chemical an dallie dproduct s industr y i s on e o f th e larges t U.S . industries . Th e industr y produce s mor

e tha n 50,00 0 differen

t chemical s an dformulation s i n mor e tha n 12,00

0 US . chemica

l plants . Abou t

1 millio n peo pl e are directly employe di n U.S . chemica l production , an d chemical s fro

mth e Unite dState s are soldi n ove r 180 coun tries . Th e industr

y ha s consistentl

y ha dapositive trade balanc e an dcurrentl y a t

leas t 20,00 0 chemical s are include di n two wa y trade . Th e chemical sector

(SIC 28 ) covers inorgani c an dorgani c chemicals , includin g industrial gase s an dpigment s (Chapte r 13) ; plasti c resin s an dsyntheti c rubbe r (Chapte r 14) ; drug s an d pharmaceutical s (Chapte

r 50) ; soaps , othe r

detergents , an d cosmetic s (Chapter

37) ; paint s an dcoating s (Chapter 15) ; agricultural chemicals , includin g fertilizer s an dpesticide s (Chapte r 13) ; adhesive s an dsealant s (Chapte r 15) ; explosives ; printin g inks ; an davariet y o f miscellaneou s cnemical s (including essentia

l oils , salt , distille dwater , etc) . Thi s chapter covers overal l development s i n th e chemica l industry , wit

h specia

l attentio n t o petrochemical s an dregulation s affecting th e chemica

l industry . Shipment s b

y th e chemica

l an dallie dproduct s industr y ros e more tha n 1 3 percent

i n 198 8 an d6 percent , t o an estimate d $274. 5 billion , i n 1989 . Th e growt h i n 198 8 wa s largel

y th e result o f pric e increases , wherea s price s in 198 9 ros e les s tha n 3 percent . Rea

l growt h amounte dt o 2. 1 percent i n 198 8 an d 3. 2 percen t

i n 1989 . Largel y becaus e o

f increasedchemica

l processin g worldwide , export s b y th e chemica

l industr y climbe dfaste

r tha n imports , risin g 21. 9 percent

i n 198 8 an d16. 8 percent

in 1989 ; impor

t gain s in th e 2 year s wer

e 19. 8 percent

an d13. 2 percent , respec tively . Th e resultin g trad e surpluse s wer e $1 2 billio n i n 198 8 an d$1 5 billio n i n 1989 . Th e US . chemica

l industr y i s stil l emergin g fro

mamassive restructuring tha t

bega n i n 1985 . Th e restructuring ha s include dmajor

acquisitions , spin-offs , plan t closings , an d extensiv e earl y retirement

an dlayof f programs . I n 1989 , R& D expenditure s b

y th e chemica

l industry increase dnearl y 9 percen t ove r 1988 , bu t capacit y utilizatio n dippe dt o 8 7 percent fro m9 0 percent

i n 1988 . Th e declin e i n utilizatio n resulte d fromdecrease drequirements i n th e chemica l processin g industrie s (i.e. , automotiv e products , constructio n materials , electronics , an dothe r

durabl e goods) . Outloo k fo r 199 0 Th e constant-dolla

r valu e o f chemical industr

y shipment s i s forecas t t o increas e abou t

1. 7 percen t i n 1990 . International Trend s an d Forecasts : Chemical s an d Allie d Product s (SI C 28 ) (i n million s o f dollar s excep t as noted ) Percen t Chang e **"* 1987 ' 1988 J igsg s 1990 * 1987-8 8 1988-8 9 1989-9 0 Industr y Dat a Valu e o f shipments ' 229,01 5 258,92 4 274,45 9 - 13. 1 6. 0 Valu e o f shipment s (1987$ ) 229,01 5 233,87 7 241,35 0 245,45 8 2. 1 3. 2 1. 7 Tota l employmen t (000 ) 811
. Productio n worker s (000 ) 46 2 Averag e hourl y earning s ($ ) 12.9 1 ----- - Produc t Dat a Valu e o f shipments ' 213,59 5 ----- - Valu e o t shipment s (1987$ ) 213,59 5 ----- - Trad e Dat a Valu e o f import s 17.12 2 20,50 4 23,21 9 23,80 8 19. 8 13. 2 2. 5 Import/ne w suppl y ratio 7 0.07 1 ----- - Valu e o f export s 26,70 1 32.55 1 38.03 5 39,44 0 21. 9 16. 8 3. 7 Export/shipment s rati o 0-12 4 - - Z Z

I Z 'Industr y an d produc t dat a are preliminary
. Trad e dat a ar e adjuste d t o confor m t o th e 198 7 'Valu e o f product s classifie d i n th e chemical s an d allie d product s industr y produce d b y al l SIC
. •< industries
. Estimated , excep t fo rexport s an d imports
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. 'Estimated
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o t th e Census ; Internationa l Trad e 'Forecast
. Administratio n (ITA)
. Estimate s an d forecasts b y ITA
. 'Valu e o f al l product s an d service s sol d b y establishment s i n th e chemical s an d allie d prod uct s industry
. U.S . Industria l Outloo k 1990—Chemical s an d Allie d Product s 12- 1P. 6

Phot o b y J.C . Evan s One ofthe largest

U.S. industries, the chemical industry employs about one million and

produces some 50,000 chemicals in more than 12,000 chemical plants. trad e i n chemical s wil

l gro w agai n a s th e chemica

l an d chemical-processing industrie s becom e mor e globa l in scope . U.S . chemica

l export s ar

e forecas t t o ris e 3. 7 percent

i n 1990 , an dimport s ma

y increas e abou t

2. 5 percent . Thi s woul

dresult i n anothe r increas e in th e ne t

positiv e trad e balance , t o abou t $1 6 billion . Restructurin g i s expectedt o continu e in 1990 , wit h acquisi

tion s o f U.S . companie s b

y bot h domesti c an dforeig

n concerns . Companie s in th e Unite dKingdom , Wes t Germany , France , an dJapa n hav e been th e major purchaser s o

f U.S . chemica

l firms . Th e industr

y i s expectedt o continu e movin g awa y fro mth e sale o f low-unit-pric e high-volum

e chemical s t o high-unit-pric e specialt y chemicals . R& D expenditure s will increas e agai n i n 1990 , bu t probabl y a t aslowe r rate than i

n 1989 . Th e industry , n o doubt , wil

l als o continu e t o wrestl e wit h th e proble

mo f findin g recruit s wit

h th e requisit

e technical talents . Severa l East-Wes t joint venture s i n th e chemica

l are aar e likel y i n 1990 . Th e Chemica

l Industr y Committe e o

f th e U.N . Economi c Commission fo

r Europ e (ECE

) plan s t o hos t

asemina r i n 199 0 fo r governmen

t an dindustr

y representative s o n East-Wes t join t venture s in th e chemica

l industry . A numbe r o f problems an dissue s wil

l requir e attentio n fro

m th e chemica

l industr y i n th e 1990s , including : intellectua l pro pert y rights ; product s liability/tor t reform; temporar

y suspen sio n o f impor t dutie s o n product s fo

r whic h there i s littl e or n o domesti c production ; industr y restructuring ; removal o f internal borde

r control s an dunificatio n o f produc t standard s an dregulation s i n th e E C b y 1992 ; an d domesti c an d inter

nationa l healt

h an d safet

y regulations. Th e long-ter

mprospect

o f th e chemica

l industr y i s amirror imag e o f th e genera

l economy . Th e industr

y expect s growth , bu t a t areducedrat e becaus e o f aprospectiv e slowing o

f economi c growth . However , th e industr

y wil l benefi t from, an d b e afoca l poin t of , th e "ne w material renaissance." Ne w material s suc h a s engineerin g polymers , composites , advance d ceramics , an d improvedadhesive s an d sealant s are changin g no t only th e wa

y material s are produced , bu t als o th e finished products . Becaus e o

f it s heav y involvemen

t i n th e developmen

t an dproductio n o

f thes e ne w materials : th e chemica

l industr y i s expecte dt o become on e o f th e mai n indicator s o

f th e statu s o f th e U.S . economy . It s expande drole wil l becom e eve n mor e evident a s th e man y new material s bein g produce ddriv e th e technolog y an dus e o

f technolog y in th e aerospace , electronic , auto , an d construction-material s industries . Internationa l trad e als o wil l pla y agreate r role i n th e futur

e o f th e chemica

l industry . U.S . export s wil

l grow , an dth e trad e balanc e shoul dcontinu e t o b e positive . However, trad e wjl l b e affecte db y stif f competitio n fro

mother producers , including som e developin g countries , an d b y U.S . environmental con trol s an d regulation s tha t

ad d t o th e U.S . cos t

o f production . Mos t countrie s manufacture som e typ e o f chemicals , an d bot h th e developin

g an dth e develope

dcountrie s recogniz e th e importanc e o

f chemica l industrie s t o thei r

economies . Fo

r th e developing countries , productio n an dprocessing o f chemical s i s awa y t o achiev e income growth . A s acountry move s u p th e economi c ladder , productio n usuall y progresse s fro mth e ra w chemical s t o value-addedproducts , an dth e chemica l proc essin g industrie s become more dominant . Growt h i n thes e industrie s stimulate s gain s in acountry' s econom y an d personal income s an d eventuall y ma y lea dt o expor t sales . Thi s evolutio n add s t o th e numbe r o f internationa l players , stimulatin g competition . Fo r domesti c companies , meetin g international competitio n i s complicatedb

y th e numbe

r o f regulations affectin

g it s chem

ica l production . Fo

r example , mos t

countrie s stil l conside

r environmenta

l problem s cause db

y chemica l productio n t o b e socia l cost s an d d o no t

hav e nearl y a s man

y environmental control s an d regulation s a s th e Unite dState s does . Thi s dif

ference show s u p in th e cos t o f US . productio n relative t o cost s i n other countries . A detaileddiscussion o f regulations applied t o th e chemica

l industr y appear s later

in thi s chapter . T o alarg e extent , th e long-ter moutloo k fo r th e chemica

l industr y depend s o n ho w well th e industr y sell s itsel

f t o th e public . Becaus e o

f th e complexit

y an ddiversit

y o f th e chemica

l industry , th e publi c remain s frightene db y wha t they d o no t understand . Thi s lac

k o f understandin g i s causin g th e industr y problem s rangin g fro

mlocation s o

f futur e plant s t o recruitin g th e bes t an d brightes t

youn g people . 

### PETROCHEMICAL S I n 1989 , high profitabilit

y resultin g fro

mmaximumutiliza

tio n o f capacity , astron g demand , an dhig h productivit

y continue din th e petrochemica l industr y (SIC s 2821,2822,2824 , 2843,2865,2869,2873 , an d2895) . Demandwa s a t it s highes t leve l in recen t

histor y durin g th e firs t

half , bu t tapere dof

f durin g th e secon dhalf

a s inventorie s increase dan d price s trende ddownward . Industr y shipment s increase d2. 8 percen t (i n constan t dollars ) i n 1989 , compare dwit

h 0. 8 percen

t i n 1988 . Th e value 

### 12= 2 U.S
. Industria l Outloo k 1990—Chemical s an d Allie d Product sP. 7

Trend s an d Forecasts : Petrochemical s (SI C 2821 , 2822 , 2824 , 2843 , 2865 , 2869 , 2873 , 2895 ) (i n million s o f dollar s excep t a s noted ) Percen t Chang e ^ 1987 ] 1988 ' 1989 ' 1990 * 1987-8 8 1988-8 9 1989-S O Industr y Dat a Valu e o f shipments ' 96,51 4 111,74 8 123,57 8 - 15. 8 10. 6 Valu e o f shipment s (1987$ ) 96,51 4 97,31 6 100,04 9 101,85 5 0. 8 2. 8 1. 8 Tota l employmen t (000 ) 25 3 Productio n worker s (000 ) 15 8 Averag e hourl y earning s ($ ) 14.9 2 ----- - Produc t Dat a Valu e o f shipments ' 92,63 1 ----- - Valu e o f shipment s (1987$ ) 92,63 1 ----- - Trad e Dat a Valu e o f import s 9,69 3 11,44 1 12,64 1 13,55 7 18. 0 10. 5 7. 2 Import/ne w suppl y ratio ' 0.08 7 ----- - Valu e o f export s 13,83 3 17,60 7 18,51 7 19,81 7 27. 3 5. 2 7. 0 Export/shipment s rati o 0.14 8 - - - - - - 'Industr y an d produc t dat a are preliminary
. Trad e dat a are adjuste d t o confor m t o th e 198 7 'Valu e o f al l product s an d service s sol d b y establishment s i n th e petrochemical s industry
. SIC
. <Valu e o f products classifie d i n th e petrochemical s industr y produce d by al l industries
. 'Estimated , excep t fo rexport s an d imports
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. Estimated
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census : Internationa l Trad e 'Forecast
. Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. o f export s ros e 5. 2 percen

t t o $18. 5 billion i

n 1989 , bu t

import s climbe d10. 5 percent

t o $12. 6 billion . Th e decrease ddeman d in th e secon dhalf

o f 198 9 resulte dfro

maslowdown in us e o f chemica l processin g material s by th e aut o an dconstruc tio n industries . Consequently , inventorie s bega n t o rise. Nevertheless , capita

l expenditure s fo

r new plant an dequip

ment in th e petrochemical s industr y ar e believe

dt o hav e risen t o arecordo

f mor e tha n $2 1 billio n in 1989 . Thi s appear s t o b e aggressiv e expansion , bu t i t doe s no t nearly equal th e rate s o f increas e i n capital expenditure s in th e lat e 1970s . Th e industry' s ethylen e demandgrowt h projectio n call s fo

r contin

uin g yearly increase s in capacit y expansio n i

n th e 1990s . Earl y i n 1989 , increase s in deman dfo r petrochemical s pushe dproductio n t o th e maximum , in som e case s t o a s muc h a s 11 0 percent

o f capacity . However , th e econom y slowe d towardth e en do

f 1989 , thu s reducin g th e pressur e o n supply o f petrochemicals . Thi s allowe dcompanie s a n opportunit

y t o adjust , permittin g down tim e fo r badl y neededroutin e preven tiv e maintenance . Effor

t i s no w being directe dtowar dincreas

in g outpu t

throug h th e eliminatio n o f bottlenecks . A s aresult o f th e heav y releas e o

f personnel , throug h earl y retirement s o r

layoff s in th e earl y 1980s , th e petrochemical industr y los t awealt h o f technical an dproductio n expertise . Th e averag e staf

f age/experienc e leve

l ha s declineda s aresul t o f th e many regula

r an dearl y retirements . Thi s expertis e wa s sorely missedwhen th e industry wa s operatin g a t maximu m capacit y i n th e late 1980s . I n addition , accidents , fires, un planne d shutdowns , an dothe r problem s hav e occurre din th e petrochemica

l industr y durin g th e pas t

1 0 year s a t

rate s 2- 3 time s thos e o

f earlier years . Researc h an ddevelopmen

t expenditure s ros e 1 0 percen t t o a n estimate d$11. 7 billion i

n 1989 , slightl

y below th e 10. 4 per

cen t ayea r average dfrom198 2 t o 1987 . Becaus e o f read y acces s t o feedstock , Canad ai s fast becom

in g amajor

playe r i n th e worl dpetrochemical s industry . Severa l U.S . petrochemical companie s ar e lookin g t o expan d o r initiat e petrochemica

l productio n in Canad ain preferenc e t o th e Unite dStates . Fiv e new plan t proposal s fo

r Canad a ar e under study by U.S . firms.

Outloo k fo r 199 0 Th e market s fo

r petrochemical s shoul dhol du p fairly well throug h 1990 . Th e valu e o f shipment s (i

n 1987 dollars ) i s U.S
. Industria l Outloo k

1990—Chemical s an d Allie d Product s

forecas t t o increas e 1. 8 percent , two-third s o f th e increas e o

f 198 9 bu t stil l twic e tha t

o f 1988 . Ther e wil

l be som e slack t o take up . Wit

h ne w capacit y comin g o n stream , operatin g rate s coul ddro p fro

mth e curren t

9 8 percent

o f capacit y t o 9 0 percen t b y 1991 . Th e valu e o

f export s shoul dincreas e t o $19. 8 billion , 7. 0 percen t

over 1989 . Import s wil

l probabl y reac h abou t

$13. 6 billion , 7. 2 percen t ove r 1989 . Th e petrochemica

l industr y i s watchin g closel

y t o see tha t 199 0 expansio n commitment s d o no t excee ddemand . Som

e expert s believe tha t

th e lesson s learne ddurin g th e oversupply o f th e earl y 1980 s hav e give n managemen t

valuabl e experi

ence , whic h wil

l preclude ambitiou s increase s i n productio n base do n temporar

y shortage s an dhig h prices . Producer s ar e lookin g a t long-ter mrequirement s base do n their estimate s o f th e stabilit

y o f th e U.S . dollar . Accordin g t o amajor

chemical trad e journal , th e ne w capacit y comin g o n streamthi s yea r wil l hav e th e flexibilit

y t o us e awid

e variet y o f feedstocks , rangin g fro

methan e t o napth aan dga s oil . Therefore , th e stron g feedstoc k competitio n between crud e oi l fraction s an dnatura l ga s liquid s will continu e an dwil

l ten dt o hol dpetrochemica l price s i n check . Long-Ter m Prospect s Th e balancin g o

f factor s suc h a s prices , capacit y expansion , operatin g rates , researc h an ddevelopment , an dpersonne l utilizatio n wil

l determine t o agrea

t exten t how th e petrochem

ical s industr

y fare s throug h 1994 . B

y then , th e industr

y shoul d b e operatin g at

ful l capacity , wit

h an averag e growt

h rat e o f 2 percen t ayear . 

### REGULATION S I N TH E CHEMICA L INDUSTR Y Th e U.S . chemica

l industr y i s regulate dunder

suc h law s a s th e Emergenc y Plannin g an dCommunit y Right-to-Kno w Act , th e Clea

n Ai r Act , th e Toxi c Substance s Contro l Act , th e Resourc e Conservatio n an dRecover y Act , Superfund , th e Clean Wate r

Act , th e Saf

e Drinkin g Wate r

Act , an dth e ne

w Chemical Diversio n an dTraffickin g Act . I n addition , th e industry meet s standard s se t by th e Occupationa

l Safet y an d Health Administration . 12- 3P. 8

Thes e an dman

y othe r regulatory obligation s increas e th e industry' s capital expenditure s an doperatin g costs . I n 1986 , th e mos t recen t yea r fo r whic h figure s ar

e available , th e chem

ica l industr y spent abou t $62 4 millio n on capita

l expenditure s fo r pollutio n abatement ; annualize doperatin g expenditure s fo r pollutio n abatemen t

accounte dfo

r anothe r $2. 7 billion . Emergency Planning and Community-Right-to-Know Act Th e Emergency Plannin g an dCommunity-Right-to-Kno w Ac t i s th e thirdtitl e o

f th e SuperfundAmendment s an d Reauthorizatio n Act , signedint o la w in 1986 . Know n a s Titl e III , th e Emergency Plannin g an dCommunity-Right-to-Kno w Ac t i s afree-standin

g la w affectin g nearly al l US . communitie s an dnearl y ever

y industr y o r busines s tha t

produces , stores , buys , or ship s hazardou s material s covere dunder th e law . Titl e II I ha s tw o primar

y functions . First , i t

mandate s emergency plannin g in virtuall y al l communities . Second , th e la w give s communitie s th e right t o kno w mor

e abou t hazar

dou s material s usedb

y certai n industries . For coveredindustries , Titl e II I set s specific reporting requirements an ddeadlines . Sinc e Octobe r 1987 , companie s tha t use , process , o r

manufacture certai n hazardou s material s have hadt o submit

materia l safet y dat asheet s or

list s o f chem

ical s kep t o n site . On Jul y 1 o

f eac h year , covere

dcompanie s als o mus t report inventorie s o

f specific chemical s kept

in th e workplac e an dannual releases o f hazardou s material s int o th e environment . Reporte dinformatio n i s availabl e t o th e publi c an dha s been th e focu s o

f muc h attention . Covere dindustrie s s o fa

r hav e reportedenvironmental releases made in 198

7 an d1988 . Th e 198

7 dat aare alread

y i n a n Environmental Protectio n Agency (EPA ) computerize d dat abas e tha t

ca n b e accesse db

y th e public . Th e 198 8 dat a wil l als o b e entere dint o th e dat abase . Industr y efforts to reduce emission s bega n befor e th e enact ment o f Titl e HI an dar

e pickin g u p speed . Man

y companie s have undertake n significan t program s t o reduc e thei r environmenta

l releases . I n addition , th e Chemica l Manufac

turer s Association , (CMA ) whos e member s represent mor e than 90 percent

o f th e U.S . productiv e capacit y o f basi c indus

trial chemicals , hav e adopte dachemica l release reduction polic y an dprogra

mdesignedt o increas e protectio n fo r chemi

cal-plan t worker s an dresidents nea r plants . Th e policy com

mit s CM A membe

r companie s t o reduc e releases t o al l environmenta

l media . In additio n t o their

reporting responsibilities under Titl e III , covere dfacilitie s ar

e require dt o participate i n th e loca

l emergency-plannin g effort s mandate db y th e law . Clean Air Act EP A list s an dregulate s hazardou s air pollutant s under

Sec

tio n 11 2 o f th e Clea n Ai r Act , an dha s develope

dan dpro mulgate dNationa l Emission s Standard s fo r Hazardou s Ai

r Pollutant s (NESHAPs ) fo

r both ne w an dexistin g pollutan t sources . EP

A s o fa r ha s decide dt o examine approximately 8 0 additional substances . EP

A ha s listedeigh

t substance s fo

r NESHAPs , o

f whic h seve

n hav e been formall

y regulated . Action o n 1 0 other s i s pending . Th e Clea n Ai r Ac t ha s no t been significantly amende din mor e tha n adecade , althoug h legislator s have workedo n reauthorizin g an damendin g th e la w in session'after

session beginnin g wit

h th e 97t h Congress . I n 1989 , President Bush proposedamendment s t o th e la w tha t include provision s on ai r toxics , attainmen t

o f ozon e standards , an daci drain. Althoug h i t i s no t th e onl y bill , th e administratio n proposa l raise dhope s tha t

th e 101s t Congres s woul damen dth e Clea n Ai r Act . Toxic Substances Control Act Congres s enacte dth e Toxi

c Substance s Contro l Ac

t i n 1976 . Th e la w wa s du e t o b e reauthorize din 1984 , bu t bill s t o d o tha t diedin bot

h house s o

f Congress . TSCA remains in forc e throug h acontinuin g resolution . O f TSCA' s many regulatory programs , on e o

f th e mos t significan t fo r th e chemica

l industr y i s th e Sectio n 5 progra

mrequiring companie s t o submi t a premanufacture notic e fo

r eac h ne w chemical . Thi s notic e mus t includ e al l availabl e dat ao n healt h an denvironmental effects , plu s informatio n o n manufacturing , processing , an d en duse . Under

th e Generi c Significan

t New Us e Rule , EP

A require s asignifican

t new us e notic e t o b e filedfo r eac h ne w chemica l en duse . A recently publishe dfina l rul e assesse s fil

in g fee s o f $2,50 0 fo r companie s wit

h mor e tha n $4 0 million i n sale s an d$10

0 fo r smalle r companies . EP A continue s t o wor

k wit h environmental an dindustr y representatives t o review an drecommendtestin g o f man y chemicals . Th e cos t

o f implementin g th e testin g progra mi s estimate da t

severa l millio n dollar s pe

r year . EP A use s it s authority t o collec t informatio n under

Section 8 o f TSCA . I n 1986 , th e agenc y update dproduction , plant

site , an dend-us e informatio n fo r existin g chemicals . Lat

e i n 1988 , EP A establishe dth e Comprehensiv e Assessment Infor

matio n Rule (CAIR) , whic h allow s th e agency t o gathe r infor

matio n o n produce dsubstances . CAI Rwil l underg o continu

in g revie w at th e Office o

f Managemen t

an dBudget . Cos t estimate s fo

r th e firs t decade o f complianc e hav e ru n a s high a s $25 0 million . Ne w activitie s wil

l involve regulating individua l chemical s unde r TSCA Sectio n 6 . EP

A recentl y banne dmos t

use s o f asbesto s under

thi s sectio n o

f th e law . Previously , EP

A ha d use dTSCA Sectio n 6 t o regulate PCB s an dmetalworkin g fluids . Resource Conservation and Recovery Act I n 1984 , amendment s t o th e Resourc e Conservatio n an d Recover y Ac t mad e major

change s in th e law , including : ° acomplet

e ba n o n landdisposa

l o f hazardou s wast

e unles s n o migratio n fro

mth e wast

e facilit y wil l occur fo r a s lon g a s th e wast

e remains hazardou s o r

th e wast e i s treate d t o EPA-establishedlevels ; ° legall y mandate ddeadline s under whic h congressiona

l decision s becom

e effective , eve

n i n th e absenc e o

f EP A action ; ° mor e stringen t

standard s fo

r handlin g an ddisposing o f hazardou s waste ; ° atimetabl e fo

r EP A decision s fo

r listin g additional categorie s o

f chemicals , plu s criteri at o mak e delistin g mor e difficult ; an d ° regulator

y contro l of

, an dstandard s for

, undergroun d storag e tanks . EP A continue s t o implemen

t th e land-disposa

l prohibition s require dunder

th e 198 4 amendments . Decision s o n waste s liste dor identifie di

n 198 4 wil l b e made b

y Ma y 1989 . Th e treatmen t requirement s fo

r continue dlan ddisposa l wil l significantl y increas e th e cos t

o f disposa l an daddconsiderabl

y t o th e stres s o n existin g treatmen t an ddisposa

l capacity . 

### 12= 4 U.S
. Industria l Outloo k 1990—Chemical s an d Allie d Product sP. 9



# 1 3 Industria l an d Agricultura l Chemical s

The constant-dollar

value of shipments of

industrial chemicals is expected

to increase about

1.7 percent in 1990. Shipments of

organics will

rise 1.5percent, shipments of inorganics will

grow 2.2 percent, and

those of agricultural chemicals should

grow about

1 percent. Like the other chemical industry sectors, environmental concerns will

remain an important

challenge for producers of

industrial

chemicals.


### ORGANI C CHEMICAL S 

# O rgani c chemical s ar e define da s thos e chemical s tha t ar e compound s of

carbon . Fo r

statistical purposes , industrial organi c chemical s (SI C 286 ) ar e classified a s guman dwoodchemical s (SIC 2861) , cyci c crude s an d intermediate s (SI

C 2865) , an dindustria l organi c chemicals , nee (SI C 2869) . Thi s sectio n treat s only th e latte r two , whic h are combine dfo

r economi c review. Wit

h th e 1987 revision o

f th e StandardIndustrial Classificatio n (SIC) system , SI C 286 5 an dSI C 286 9 now includ e som e product s tha t

ha dbee n include din SI C 2911 , petroleu mrefining. I n 1989 , th e valu e o

f shipment s o

f organi c chemical s reache d$62. 6 billion . Measure din constan t dollars , shipment s ros e 2. 3 percent , slightly les s tha n thei r 3. 8 percent

increas e i n 1988 . Shipment s of

organi c chemical s accounte dfo r les s tha n 1 5 percent

o f shipment s o

f al l chemical s (SI

C 28 ) an d fo r hal f o f petrochemical s shipments . Th e Unite dState s exporte d$10. 1 billion wort h o f organi c chemical s i n 1989 , an dimporte d$9. 2 billion . Althoug h thi s trad e surplu s contribute dabou t 1 0 percent

t o th e overall chemical s (SI

C 28 ) positiv e trad e balanc e i n 1989 , i t was abou t half abillio n dollar s les s tha n th e surplu s i n 1988 . Th e conti

nuin g rise in organi c chemica l import s an dth e dryin g u p o f th e Chin amarke t

fo r US . export s accounte dfo r th e narrow in g o f surplu s in organics . Th e increas e in organi c chemical s shipment s in 198 9 .wa s concentrate di n aliphati c (noncyclic ) intermediates , especially olefins , whic h are use dt o mak e polymer s an dplastics . Th e pac e o f growt h o f th e majorit

y o f organic chemical s ha dbegun t o slo w b y th e secondan dthirdquarter s o f 198 9 an dremained fla t i n th e fourt

h quarter . Substantial inventories , th e genera l economi c slowdow

n resulting i n lowe

r demand , an dastronger dolla r combine dt o mak

e 198 9 asof

t market fo r mos t organi c chemicals . Nevertheless , sale s fo r th e entire yea

r wer e highe r tha n in 1988 , an dcombine dwit h lowe r ra w material costs , providedrecor

dearning s fo

r som e industrial organi c chemica l commodit y producers .

Outloo k fo r 1990 Falling industria

l capacit y utilizatio n rates , lagging aut o an d housin g sales , slowin

g expor t markets , an dweakenin

g chemica l commodit y price s indicate tha t

th e slowdow

n in sale s o

f organi c chemical s coul dcontinu e i n 1990 . Constant-dolla

r shipment s o

f organi c chemical s shoul dincrease , bu t onl y b y abou t 1. 5 percent . Price s wil

l probably rise ver

y littl e (perhap s 2 percent) , partl y i n readjustment fro mtheir high leve l o f earl y Trend s an d Forecasts : Organi c Chemicals , Excep t Gu m an d Wood (SI C 2865 , 2869 ) (i n million s o f dollar s excep t a s noted ) Percen t Chang e ^ 1987 ] 1988 J 1939 s 1990 * 1987-8 8 1988-8 9 1989-9 0 Industr y Dat a Valu e o f shipments ' 50,97 2 56.74 5 63,75 4 66,25 2 11. 3 12. 4 3. 9 Valu e o f shipment s (1987$ ) 50,97 2 49.79 7 51,16 6 51,94 7 -2. 3 2. 7 1. 5 Tota l employmen t (000 ) 12 3 12 5 12 6 12 7 1. 6 0. 8 0. 8 Productio n worker s (000 ) 71. 0 72. 5 73. 2 73. 6 2. 1 1. 0 0. 5 Averag e hourl y earning s ($ ) 15.9 9 ----- - Produc t Dat a Valu e o f Shipments ' 46,44 8 56,10 3 62,56 9 64,75 9 20. 8 11. 5 3. 5 Valu e o f shipment s (1987$ ) 46,44 8 48,22 0 49.33 2 50,08 9 3. 8 2. 3 1. 5 Trad e Oat

a Valu e o f import s 7.21 7 8,47 7 9,23 4 9,81 6 17. 5 8. 9 6. 3 Import/ne w suppl y ratio 7 0.11 6 __-.. . Valu e o f export s 7,95 7 9,90 6 10,13 1 10,70 8 24. 5 2. 3 5. 7 Export/shipment s ratio 0.16 3 - - - - - - 'Industry an d product data ar e preliminary
. Trad e dat a ar e adjuste d t o confor m t o th e 198 7 SIC
. 'Valu e o f product s classifie d i n th e organi c chemicals , excep t gu m & woo d industry pro - 'Estjmated , excep t fo rexport s an d imports
. duce d b y al l industries
. 'Estimated
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments , •forecast
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census : Internationa l Trad e tyalue o f al l product s an d service s sol d b y establishment s i n th e organi c chemicals , excep t Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. gu m & woo d industry
. U.S
. Industria l Outloo k 1990—Industria l Chemical s 13- 1P.1 0

1989 , an dprofitabilit

y fo r th e sector i s expectedt o b e low . Th e trad e balanc e i

n organi c chemical s shoul dremain positive . R& D spending , whic h ros e modestly in 1989 , i s expectedt o remain leve

l a s apercentag e o

f industry sale s i n 1990 . Long-Ter m Prospects Lik e mos t o f th e chemica

l industry , th e organi c sector expect s growt

h i n th e future , bu t

a t aslowe r rate tha n in recen

t years . Th e industr

y i s projecte dt o grow i n th e nex t 5 year s a t an annua l rate o

f abou t 1. 5 t o 2. 0 percent . Industr

y pro fitability shoul dimprov

e a s firms acquir

e downstrea

mcapacit y producin g highe

r value-adde dproducts . Productivit y shoul d als o improv e insofa

r a s th e industr

y invest s i n high-tec h plan t an dequipment

an dcut s back

o n personne l requirements. Th e exten t o f regulation wil

l influenc e th e natur e an damoun t o f th e organi c chemica

l industry' s investmen

t i n streamlining an d addin g t o it s presen

t productio n capacity . 

### INORGANI C CHEMICAL S Inorgani c chemical s constitut e almos t 2 5 percent

o f US . shipment s o

f industria l organi c an dinorgani c chemicals . They ar e predominantly basi c chemical s (als o calledheavy , bulk , or commodit y chemicals ) suc h a s chloralkalies , (SI C 2812) ; industrial gases , (SI

C 2813) ; an dacids , salts , inorgani c compounds , an drare earth meta l salt s (SI C 2819) , whic h accoun t fo r abou t two-third s o

f al l inorgani c chemica

l production . Th e majo r consumer s o

f inorgani c chemical s include th e automotive , housing , paper , packaging , pharmaceutical , pain t an dink , an dfertilize

r industries . Deman dfo

r thes e product s depend s o n th e overal

l healt h o f th e econom

y an dspecificall

y tha t o f user industries . Th e inorgani c chemical s industrie s ar e characterize db

y lo w level s o f researc h an ddevelopment , declinin g rates o f growt h an dproductivity , an dovercapacity . Onl y th e mos t efficien t producer s are likel

y t o surviv e in th e lon g run . Company expan sio n i s infrequent , an dmuc h effor t i s devotedt o achievin g economie s i

n th e cost s o

f feedstocks , energy , an dlabor . /Acquisi

tions , mergers , an dconsolidation s hav e occurre dfrequently i n recent years . Export s o f inorgani c chemical s have generall y increaseddur

in g th e 1980s . They jumpe dnearl y 1 5 percent between 198 3 an d1984 , reaching $3. 3 billion , bu t the n decline db

y nearl y 7 percent between 198

4 an d1985 . A perio do

f slo w recovery followed , an din 1989 , export s wer e an estimate d$3. 7 billion , a n increas e o

f 2 0 percen t

fro mthei r 198 5 level . Import s o f inorgani c chemical s increase dsharply i n th e lat e 1980 s i n response t o increase ddomesti c demand . Afte r fall

in g nearl y 3 percent

between 198

4 an d1985 , t o jus t

ove r $2. 7 billion , they climbe dconsistentl y fro m198 6 t o 1988 , reachin g $3.0 5 billio n an dremaining roughl y a t tha t leve l i n 1989 . Constant-dolla

r industr y shipment s o

f inorgani c chemical s are expecte dt o increas e 2. 2 percent in 1990 . Outpu t

wil l be

Phot o b y J . C . Evan s Sales increases and

lowerraw materials costs provided record earnings forsome organic chemicals producers in 1989. Growth of 1.5 percent

is expected in 1990. 

### 13- 2 U.S
. Industria l Outloo k 1990—Industria l Chemical sP.1 1

percen t o f th e market ; an dth e Fa r East , wit

h Japa n dominatin g production , account s fo r mor e tha n 2 0 per

cent . Th e U.S . historicall y ha s ha dapositiv e trad e balanc e i n pesticides . Th e rati o o

f export s t o import s peake da t 1 1 t o 1 i n 1974 , however, an db

y 1989 haddecline dt o abou t 6 to 1 . Th e Internationa l Trad

e Commissio n (ITC) classifie s pesticide s a s herbicide s (including plant-growt h regulators), insecticide s (includin g rodenticides , soi l conditioner s an d fumigants) , an dfungicides . ITC sale s dat aon pesticid e organi c chemical s show herbicide s accountin g fo r ove r 6 0 percent , insecticide s fo

r abou t 3 0 percent , an dfungicide s fo r les s tha n 10 percent . O f th e thre e subgroups , herbicide s have ha dth e mos t research fundin g an dhav e dominate dtechnologica l progress . The y als o have been th e mos t

susceptibl e t o piratin g an dhave hadth e leas t

favorable ratio o

f export s t o import s durin g th e 1980s . In 1988 , 13 0 companies , 7 0 wit h U.S . plan t

locations , sup plied21 9 pesticide chemical s t o th e U.S . market . Si x companies , all wit

h U.S . productio n facilities , accounte dfo r abou t hal f o f U.S . sales , bu t

only thre e wer

e U.S.-owne

dcompanies . Eleve n mor e companie s accounte dfo

r an additiona l 3 5 percen t o f U.S . sales . Consolidatio n o

f pesticide productio n facilitie s under fewe r companie s continue di n 198 9 becaus e o f th e increasin g dif

ficultie s facing producer s o f agricultural chemicals . Thes e include th e increasin g cos t o f R&D , th e abus e o

f intellectual propert y rights , an denvironmental regulations. Th e expens e o f conductin g stringen t

toxicit y test s in complianc e wit h environmenta

l regulation s an dth e increasing difficult y o ffinding ne w product s hav e booste daverag e R& D cos t fo r asingl e ne w pesticide t o mor

e tha n $5 0 million , compare dwit h an averag e cos t

o f $ 6 millio n in 1976 ; averag e developmen t tim e ha s lengthene dt o 9 years .

Outloo k fo r 1990 Th e constant-dolla

r valu e o f shipment s o

f pesticide s i s expecte dt o dro p abou t

1 percent

i n 1990 , althoug h thei r

us e will increase . Reason s fo r th e decreas e include (1 ) th e us e o f mor e effectiv e pesticides , decreasin g th e cos t pe r acr e treated ; (2 ) th e negativ e impac t

o f violation s o

f U.S . intellectua

l prop erty rights in worldmarkets ; an d(3 ) pressure s o n U.S . farmers t o reduce thei r

us e o f toxi c chemical s becaus e o f alleged ground-wate

r pollution . Long-Ter m Prospect

s According t o a198 9 surve

y conducte di

n th e U.S . soybea

n market , mor

e tha n 2 5 percen t

o f U.S . soybea

n farmer s pla

n t o curtai l their

us e o f pesticide s durin g th e nex

t 5 years becaus e o f increasin g environmenta

l concerns . In response t o th e pros pec t o f relatively slow growt

h o f conventiona

l pesticides , pro ducer s ar e searchin g fo

r alternative s amon g genetically engineere dproducts , whic h are expectedt o proliferat e i n th e 1990s . Such product s include bacteria , viruses , fungi , an dother microorganism s tha t

wil l attac k plant pests . Th e worl

dmarke t i n thes e pesticide s coul dreach $ 8 billion b y th e en do

f th e 1990s , accordin g t o recognizedmarket researchers o

f microbiologica

l an dbiochemica

l pesticides . Patent s o n living organis mpesticide s remain t o b e tested , however . Commercializatio n o

f abiopesticide requires only 3 t o 5 year s an dmuc h les s R& D investment tha n conventiona

l pesticides . Th e tim e requiredt o develo p apaten t i s asignifi

can t par t o f th e 17-yea

r paten t lif e fo r bot h th e conventiona

l pesticide s an dth e biopesticides , bu t les s fo r th e latter , an dpro ducer s ar e reluctant

t o spen dmillion s o

f dollar s in R& D fo

r suc h ashor

t perio do f paten t protection.—

Frank P. Maxey, Office of Chemicals and

Allied Products, (202) 377-0128. September

1989. Additiona l Reference s Inorganic Fertilizer

Materials and

Related Products, M28B , U.S . Departmen t o f Commerce , Washington , D C 20230 . Synthetic Organic Chemicals. U.S. Production and Sales, U.S . International Trad e Commission , Washington , D C 20436 . U.S. Exports and

US. Imports, Tailor-Made Computer Data, International Trad e Administration , U.S . Department o f Commerce , Washington , D C 20230 .

U.S
. Industria l Outloo k

1990—Industria l Chemical s 

### 13- 7P.1 2



# 1 4 Plastic s an d Rubbe r

Constant-dollar

industry shipments of

plastic materials are projected to increase 2 percent

in 1990, and

those of synthetic rubber are expected

to grow by 2 percent. Shipments ofrubber and plastics products should

increase 3 —

4 percent, with increases of

2-3 percent

in rubber

products and

3-4 percent in plastics products. 

# T hi s chapter

cover s plastic s an drubber material s (SIC 282 1 an d2822 ) an dmos t

o f rubber an dplasti c prod

uct s (SI C 30) . Th e latter

categor y include s th e follow

ing industries : tire s (SIC 3011) , rubbe r an dplastic s footwea

r (SI C 3021) , rubber

an dplastic s hos e an dbeltin g (SI C 3052) , fabricate drubber

product s (SI

C 3069) , an dmos t

o f miscel

laneou s plasti c product s (SI C 308) . I n 1987 , product s previousl y include di n SI C 307 9 (miscellaneou s plasti c products ) under th e 1977 SI C definitio n wer e reclassified a s SI C 30 8 accordin g t o th e 198 7 SI C defini

tion . Thi s expande dSI C subsume s th e followin g industries : unsupporte dplastic s fil

man dshee t

(SI C 3081) , unsupporte d plastic s profil

e shape s (SI

C 3082) , laminate dplastic s plate s an d sheet (SI C 3083) , plastic s pip e (SI

C 3084) , plastic s bottle s (SI C 3085) , plastic s foa

mproduct s (SI

C 3086) , custo mcompoun ding o f purchase dresins (SI

C 3087) , plastic s plumbin g fixtures (SI C 3088) , an dplasti c products , ne e (SI C 3089) . I n addition , hos e an dbeltin g hav e been recoded fro mSIC 304 1 (1977 SIC ) t o SI C 305 2 (1987 SIC) . 

### PLASTIC S Th e plastic s material s industry (SI C 2821 ) ha dhig h sale s volum e fro mlate 1987 throug h earl y 198 9 a s deman doutstrip

pedsupply . Thi s stron g marke t resultedi n pric e increase s o

f 2 0 percent

fo r som e plastics , lowe

r inventories , an dhigh capacit y utilization . B y mid-1989 , however , deman dwa s weakenin g an dprice s hadbegu n t o decline . Contributin g t o th e reversal was asoften

in g o f th e US . economy , increase dfeedstoc k an dresin s capacity , an da n unstabl e politica l environment

i n China — th e secon dlarges t

U.S . expor

t market fo r plastics . A s aresult, 198 9 industr

y shipment s ar e estimate dt o b e u p onl y 2 percen t i n constant-dolla

r terms , followin

g an increas e o

f almos t 6 percent i n 1988 . Industr y employment

in 198 9 decline d0. 7 percen t t o 55,500 . Productio n worker s accounte dfo r 6 3 percen t

o f th e industry workforce . 

### Multiple Uses Plastic s mak

e u p th e larges t

categor y o f material s use din th e Unite dState s today , a s they continu e t o displac e metal , glass , paper , wood , an dothe r materials . Thes e market

inroad s hav e com e abou t a s aresult

o f ne w technologie s tha t

enabl e plasti c t o hav e improve dqualitie s suc h a s high temperature resistance, hig h strength-to-weight ratios, an dchemicaLcor

rosive resistance. Trend s an d Forecasts : Plastic s Material s an d Resin s (SI C 2821 ) (i n million s o f dollar s excep t as noted ) Percen t Chang e ^ 1987 ] 1988 * 1989 > 1990 * 1987-8 8 1988-8 9 1989-9 0 Industr y Data Valu e o f shipments ' 26,14 4 33,81X 1 36,61 6 38,09 6 29. 3 8. 3 4. 0 Valu e o f shipment s (1987$ ) 26,14 4 27,61 4 28,16 6 28,73 0 5. 6 2. 0 2. 0 Tota l employmen t (000 ) 55. 9 55. 5 55. 5 55. 5 -0. 7 0. 0 0. 0 Productio n worker s (000 ) 34. 7 ----- - Averag e hourl y earning s ($ ) 15.2 4 ----- - Product Oat

a Valu e o f shipments 6 27,69 8 ----- - Valu e o f shipment s (1987$ ) 27,69 8 ----- - Trad e Data Valu e o f import s 92 7 1,15 8 1,27 3 1,40 0 24. 9 9. 9 10. 0 Import/ne w suppl y ratio 7 0.03 2 ----- - Valu e o f export s 3,68 8 5,03 4 5,43 7 5,76 3 36. 5 8. 0 6. 0 Export/shipment s rati o 0.13 3 - - - - -_

_ - 'Industr y an d produc t dat a ar e preliminary
. Trad e dat a are adjuste d t o confor m t o th e 198 7 'Valu e o f product s classifie d i n th e plastic s material s an d resin s industr y produce d b y al l Sic
. industries
. 'Estimated , excep t fo rexport s an d imports
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. 'Estimated
. " ' SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e •Forecast
. Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. 'Valu e o f al l product s an d service s sol d b y establishment s i n th e plastic s material s an d resin s industry
. U.S . Industria l Outloo k 1990—Plastic s an d Rubbe r 14- 1anet

trade , surplu s o

f $3. 9 billion fo

r SI C 2821 . I n 1989 , —Moira M. Shea, Office of Chemicals and

Allied Products, export s ros e an estimate d8 percent while import s ros e 1 0 per

- (202) 377-0128, September 1989. cent , fo r an estimate dne t

trad e surplu s o

f $4. 4 billion . Th e larges t U.S . market s i n 198 9 wer e Canad a(11. 5 percen t

o f Additiona l Reference s th e total) , Chin a(11. 3 percent) , an dHon g Kon g (7. 9 percent) . Whittingtons Dictionary of Plastics, Technomi c Publishin g Co . Inc . Stam

Th e leadin g U.S . supplier s wer e Canad a(34. 7 percent) , Japan ford , C T 06902 . (17. 6 percent) , an dWes t German y (15. 2 percent) . Societ y o f th e Plastic s Industry , Washington , DC . 198 7 Census of

Manufactures, MC87-1-28B(P) , Burea u o f th e Census , U.S . Outloo k fo r 1 99 0 Departmen t o f Commerce , Washington , D C 20233 . U.S . plastic s producer s shouldexperienc e anothe r goodyea r i n 1990 . However , industry growt h i s expecte dt o b e slowe

r ©WMTMiSTnir* ie> n niaiss o than in 198 8 an dearl y 198 9 a s deman dsoften s an dprofit &V

W I I Inlf c 101 , HUTOE H rutc s leve l of

f " . ,. V U.S . constant-dolla r industry shipment s o

f syntheti c rub

Ne w facilitie s comin g on-strea mar e expecte dt o increas e be r (SI C 2822 ) ros e abou t

2 percen t in 198 9 afte

r declinin g capacit y b y an estimate d7. 5 percent in 1990 , an dproduc

- s ijghtl y in 1988 . Shipment s hav e been affectedby reduce d tio n wil l ris e abou t

5 percent . Thi s adde dproductio n capacit y deman dfro

mdomesti c automobil e manufacturers , large r shoul dhel p t o reliev e th e tight capacity , an dwill limit

pne e impor

t volume s o

f competitivel y price dtires , an dincrease s increases . Som

e plasti c material s ma

y experienc e asligh

t pric e j nimport s o

f moto r vehicle s already equippe dwit h tire s o r ^P

- othe r rubber parts . Th e rat e o

f increas e i n expor

t sale s i s expecte dt o slow in A tren df ro mgeneri c all-purpos e resin s t o mor e specialized 1990 . Sale s t o th e importan t Chines e marke t

ma y sa g a s elastomer s ha s continue dan dpu t upwardpressur

e o n investor s an dcompanie s determin e th e politica l climate in monomer price s over

th e las t 1- 2 year s Chin aan dit s implication s fo r business . Leadin g producer s of syntheti c rubber

resin s i n 1989 , wit

h Long-Ter mProspect s a t leas t ^ 3 5 ° millio n i n annua l sales , wer e Polysar , Uniroyai ,

. DuPont-Chambers , an dG E Silicone . Th e numerou s end-users Overal l deman dfo

r plastic s material s shoul dgro w a t an inc i u d e th e automotive , energy , mining , aerospace , ordnance , annua l rat e o

f 4 percen t

durin g th e earl y 1990s . Futur e electronic , an dadhesive s industries . developmen

t o f ne w alloys , blends , additives , an dcomposite s y s o f hetj c mbb e ^ ha d bee n ; wil l foste r new application s fo

r plastic s an dsuppor

t thi s unti l 19g8)areesti ^ atedt0haved ' oppedtQ$g99 ^ £ growin ' 1989 . Deman dfo r U.S . syntheti c rubber

resin s in 198 8 came Licensin g an djoin t

venture s ma

y increas e i n Eastern ma ; n i y f ro mCanad a(1 8 percen t

shar e o f U.S . exports) , Europ e i n th e earl y 1990 s a s door s ope n t o foreig n invest

- Belgiu m(1 2 percent) , Japan (

8 percent) , West

Germany (

7 perment an dtrade . cent ) ) anf j Sout h Kore a(5 percent) . Th e U.S . plastic s industr

y shoul dretai n it s technological TJ.S . import s o f syntheti c rubbe r

hav e regaine dgroun dlos t lea di n th e globa

l marketplace . Nevertheless , challenge s an d m\ ogg anf j ar e estimate dt o hav e reache dnearly $605 millio n issue s fac e th e industry in th e 1990s , including : j n1989 . Canad awa s by fa r th e larges t

U.S . supplie

r i n 198 8 o Th e Clea

n Air Ac t an dit s costly impac t

o n th e industry (wit

h 36. 8 percen t

o f th e market) , followedb

y Japan (13. 1 i n term s o

f pollutio n controls ; percent) , Franc e (9. 4 percent) , an dMexic o (6. 3 percent) . ° Eliminatio n by 199 2 o f interna l border

control s an d unificatio n o

f produc t standard s an dothe r

regulation s i n Outloo k fo r 199 0 th e 12-natio n E C market , whic h ma y promp t th e U.S . Constant-dolla r shipment s o

f syntheti c rubber

are forecas t plastic s industry t o inves t mor e i n E C plan t

facilities , t o gro w abou t 2 percen t

in 1990 . Inroad s int o th e end-us e rathe r tha n expor

t plasti c resin s t o th e EC . tire marke t wil l b e made by imports , whether importe da s tire s Trend s an d Forecasts : Syntheti c Rubbe r(SO C 2322 ) (i n million s o f dollar s excep t a s noted ) Percen t Chang e | ^ 1987 ] 1988 J 1989 3 1990 < 1987-8 8 1988-8 9 1989-9 0 Industr y Data Valu e o t shipments 5 3,31 0 3,33 9 3,39 0 - 0. 9 1. 5 Valu e o f shipment s (1987$ ) 3,31 0 3,27 4 3,34 0 3,40 6 -1. 1 2. 0 2. 0 Tota l employmen t (000 ) 10. 8 10. 6 - - -1. 9 Productio n worker s (000 ) 7. 0 6. 9 - - -1. 4 Averag e hourl y earning s ($ ) 15.2 2 15.4 1 1. 2 Produc t Dat a Valu e o f shipments 6 3,45 2 ----- - Valu e o f shipment s (1987$ ) 3,45 2 3,47 8 3,54 8 3,61 9 0. 8 2. 0 2. 0 Trad e Dat a Valu e o f import s 39 3 46 1 60 5 62 0 17. 3 31. 2 2. 5 Import/ne w suppl y ratio 7 0.10 2 ----- - Valu e o f export s 85 8 98 5 89 9 90 5 14. 8 -8. 7 0. 7 Export/shipment s rati o 0.24 9 - - - - - - 'Industr y an d produc t dat a ar e preliminary
. Trad e dat a are adjuste d t o confor m t o th e 198 7 'Valu e o f al l product s an d service s sol d b y establishment s i n th e syntheti c rubbe rindustry
. SIC
. 'Valu e o f product s classifie d i n th e syntheti c rubbe rindustry produce d b y al l industries
. 'Estimated , excep t fo rexport s an d imports
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. 'Estimated
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Trad e 'Forecast
. Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. U.S
. Industria l Outloo k

1990—Plastic

s an d Rubbe rH4- 3P.1 4 syntheti c rubbe r

wil l depen dprimaril y o n economi c activit y by it s principa

l end-user , th e tire industry . Import s o f passenge r tire s an dmoto r

vehicle s wit

h foreign-mad

e rubbe r part s wil l continu e t o depres s domesti c deman dfo r generi c resin s suc h a s styrobutadien e (SBR) . However , increase s i n domesti c US . automobil e productio n throug h join t venture s wit

h multina

tional partner s ma

y partiall y offse

t th e downwar

dpressur e o n th e market . A wid

e rang e o f highl y specializedsynthetic-rubbe r material s fo

r new nontir e application s wil l continu e t o grad

ually displac e general-purpos e rubber . Th e combinatio n o f ne w syntheti c rubbe r

material s an dsophisticate dtechnologie s wil l result i n anew produc t

mix fo r th e industry ove

r th e nex t 5 years.— Raimund o M. Prat, Office of

Chemicals and

Allied Products. (202) 377-0128, September 1989. Additiona l Reference s 198 7 Census of

Manufactures, MC87-1-28BQP) , Burea u o f th e Census , US . Departmen to f

Commerce , Washington , D C 20233 . Synthetic Organic Chemicals, VS. Internationa l Trad e Commission , Washington , D C 20436 . RubberStatistical

Bulletin, Internationa l Rubbe r Stud y Group , London , England . Synthetic Rubber, Internationa l Institut e o f Syntheti c Rubbe r Producers , Houston , T X 77063 . RubberProduction, Shipments, and Stocks, MA30A , VS. Departmen to f Commerce , Burea

u o f th e Census , Washington , D C 20233 . Rubbe r Manufacturer s Association , Washington , DC . Internationa l Institut e o f Syntheti c Rubbe r Manufacturers , Houston , TX . 

### PRODUCT

S TIRES AND INNER TUBES Goodyear This 14-foot

wheel tests the effects on tires of

accelerating, braking, and SI C 301 1 include s adivers e grou p o f tire an dinner-tub e carrymgloads ofup to 120,000 pounds. DemanaIfortires slowedin 1989, products . Althoug h tire s an dinne r tube s fo r us e i n moto r but may pick up somewhat

in 1990. vehicle s (passenge r cars , trucks , an dbuses ) stil l accoun t fo r th e bul k o f tir e output , other

market s have becom

e strategicall

y o r installe da s original equipmen t o n importe dvehicles . Th e importan t ove r th e las t 1-2 years . Fo r

example , expansio n i s marke t als o will b e affecte db y replacemen t of syntheti c rub

- occurrin g i n tire product s an dinne r tube s fo r th e agricultural , be r material s by rubber/plasti c alloys , composit e material s an dindustrial , military , an drecreational markets . general-purpos e polyme

r resins . Thi s competitio n wil l dampe n Becaus e o f th e capital-intensiv e natur e of th e business , tire deman dfo

r th e generi c resin s an dkee p price s down . productio n an ddistributio n ar e strongly affecte

db y economie s

. _o f scale . Wit

h cost s of entr y extremel y high , entr y ha s been Long-Ter mProspect s historicall y limite dt o well-finance dmultinationa l producers , Shipment s b y th e syntheti c rubbe r industry ar e forecas t

t o state-owne dfacilitie s o f th e centrall y planne deconomies , an d gro w b y only 1- 2 percen

t annuall y throug h 1993 . Deman dfo r afe w unaffiliate dsmalle

r independen t

tire producers . Trend s an d Forecasts : Tire s an d Inne r Tube s (SI C 3011 ) (i n million s o f dollar s excep t a s noted ) Percen t Chang e 1987 ] 1988 * 1989 > 1990 * 1987-8 8 1988-8 9 1989-9 0 industry Dat a Valu e o f shipments ' 10,42 7 10,95 3 - - 5. 0 Valu e o f shipment s (1987$ ) 10,42 7 10,58 3 10,74 2 10,90 3 1. 5 1. 5 1. 5 Tota l employmen t (000 ) 65. 4 66. 1 66. 5 - 1. 1 0. 6 Productio n worker s (000 ) 52. 6 53. 2 53. 5 - 1. 1 0. 6 Averag e hourl yearning s ($ ) 15.4 0 15.9 0 - 3. 2

Product Dat a Valu e o f shipments * 10,03 4 10,51 5 11,04 5 - 4. 8 5. 0 Valu e o f shipments (1987$ ) 10.03 4 10,18 9 10,33 8 10,49 2 1. 5 1. 5 1. 5 Trad e Dat a Valu e o f import s 2,22 7 2,40 5 2,71 1 - 8. 0 12. 7 Import/ne w suppl yratio ' 0.18 9 --_.. . Valu e o f export s 54 1 79 9 89 9 - 47. 7 12. 5 Export/shipment s rati o CH15 4 0X17 6 - - 40 7 - - 'Industr yan d produc t dat a ar e preliminary
. Trad e dat a are adjuste d t o confoimt o th e 198 7 'Valu e o f al l product s an d service s sol d b yestablishment s i n th e tie s an d inne rtube s industry
. SIC
. 'Valu e o f product s classifie d i n th e tire s an d inne rtube s industr yproduce d b yal l Industries
. 'Estimated , excep t fo rexport s an d imports
. 'Ne w suppl yi s import s plu s correspondin g produc t shipments
. Estimated
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census : Internationa l Trad e 'Forecast
. Administratio n (ITA)
. Estimate s an d forecast s b yITA
. 14- 4 U.S
. Industria l Outloo k 1990—Plastics an d Rubbe rP.1 5

Th e worldwid

e tire marke t

in 198 9 i s estimate dt o hav e surpasse d$4 0 billio n an dwa s dominate db y asmal l number of larg e multinationa l manufacturers . Goodyea r accounte dfo

r abou t 18. 3 percen t

o f th e total , followedb y Micheli n (18.1) , Bridgestone/Fireston e (16. 5 percent) , Sumitomo-Dunlo p (7. 5 percent) , Pirelli-Armstron g (7. 4 percent) , Continental-General (6. 6 percent) , Uniroya

i Goodric h (4. 3 percent) , an dYokoham a (3. 7 percent) . Unidentifie dparticipant s accounte dfor th e remainin g 17. 6 percent . Constant-dolla

r shipment s o

f tire s an dinner

tube s ros e abou t 1. 5 percent i n both 198 8 an d198 9 afte r severa l year s o f gradua l decline . Volume o

f U.S . productio n o

f moto r vehi

cle tire s ha s no t

change dsignificantly sinc e aslowdow n i n 1983 , holdin g a t

aroun d20 0 millio n units . Industry sale s leader s i n 198 9 were Goodyear , Firestone , Uniroyai , Goodrich , Michelin , General , Armtek , Kelly-Springfield , Cooper , Armstrong , an dDunlop . Tire import s hav e regaine dgroun dsinc e th e mid-1980 s an d ar e estimate da t

$2,71 1 millio n i n 1989 , u p 12. 7 percen t from 1988 . To p supplier s t o th e Unite dState s i n 198 8 were Japa n (31. 6 percent) , Canad a(17. 0 percent) , South Kore a(8. 3 percent) , Spai n (7. 0 percent) , an dFranc e (5. 5 percent) . Export s o f tire s i n 198 9 ros e fo

r th e thir dstraigh t

year , t o a n estimate d$89 9 million . Japan , Canada , an dMexic o were th e larges t expor t markets , wit

h 3 3 percent , 1 9 percent , an d 7 percen t o f tota l exports , respectively . Ove r th e las t 2 years , anumbe r

o f major domesti c tir e manufacturer s hav e bee n acquire db y o r merge dwit

h foreig n concerns . Thi s ha s le dt o consolidatio n o f an already concen trate dworl dindustr

y an dha s mad e anumbe r

o f highl y diver

sifie dforeig n companie s participant s i n th e domesti c market . Growin g import s an dvigorou s merge r an dacquisitio n activit

y hav e resulte di n a n extremel y competitiv e environmen t for th e more specialize dmarke t segments . Outloo k fo r 199 0 Constant-dolla

r industry shipment s ar e forecas t t o rise anothe r 1. 5 percen t

i n 1990 . Import s o

f bot h tire s an dmoto r vehicle s with mounte dtire s will probabl y continu e t o affec t domesti c tir e productio n adversely , althoug h increase s i n mileag e driven , whic h boos t deman dfor

replacemen t

tires , ma y counterac t

thi s trend . Tir e import s thu s ar e projecte d t o remai n stabl e i n 1990 , whil e export s ma y grow modestly , provide dth e dolla

r remain s competitive . Long-Ter m Prospect s Deman dfor

standar dtire s wil

l gro w n o faste

r tha n 2 per

cen t annuall y fo

r th e nex t 3- 5 years . Deman dfo

r high-value , specialize dtir e product s fo r th e recreationa l an dindustrial transportatio n markets , however , i s projecte dt o gro w faste r tha n th e averag e becaus e o f diversificatio n i n thes e end-user markets . Deman dfo

r more sophisticate daircraf

t tire s appear s likel y t o b e particularl y promising i n th e coming decade . Sourc

in g pattern s will continu e t o chang e ove r th e nex t fe w year s a s aresul t

o f continuin g merger/acquisitio n activit y an d increasin g cooperatio n betwee n domesti c an dforeig n firms i n automobil e production . RUBBER

AND PLASTICS FOOTWEAR Th e rubbe r

an dplastic s footwea

r industry (SIC 3021 ) include s protectiv e footwea r an drubber-soled , fabric-uppe r footwear . Protectiv e footwear i s use di n industria l environment s an di n certai n case s incorporate s shock-resistan t material s othe r

tha n rubbe r

o r plastic . Rubber-soled , fabric

uppe r footwea r i s normall y use dfo

r leisur e o r athleti c pur pose s an dinclude s tenni s shoes , basketbal l shoes , espadrilles , an drunnin g shoes . Constant-dolla

r shipment s o

f rubbe r an dplastic s footwea

r ar e estimate dt o hav e decline d5. 9 percen t i n 198 9 afte

r a4. 8 percen t decreas e i n 1988 . Productio n of rubber-sole dfabric

uppe r footwea r ha s droppe dnoticeabl y sinc e 1982 , whil e out pu t o f protectiv e footwea

r actually gre

w durin g th e mid-1980s . Employmen

t o f productio n worker s appear s t o hav e recovere d t o abou t 11,00 0 i n 198 9 afte

r declinin g i n 1988 . Import s o f rubbe r an dplastic s footwea

r hav e grow n steadily sinc e 1985 , reachin g nearly $45 1 million i n 1988 , bu t decline d t o 198 9 t o a n estimate d$408. 7 million . I n 1989 , Sout h Kore a accounte dfo

r nearl y one-hal f

o f imports , followedby China , Taiwan , an dMexico . Export s i n 198 9 decline d19. 2 percen t t o a n estimate d$10. 1 million . Majo r U.S . export

market s i n 198 8 were Ital y (1 3 percen t o f exports) , Canad a( 9 percent) , Mexic o ( 8 percent) , an dWes t German y an dJapa n (

7 percen t each) . Trend s an d Forecasts : Rubbe r an d Plastic s Footwea r (SI C 3021 ) (i n million s o l dollar

s excep t a s noted ) Percen t Change

_1987 ] 1988 2 1989

J 1990 * 1987-8 8 1988-8 9 1989-9 0 Industr y Dat a Valu e o f shipments ' 58 5 59 0 - - 0. 9 Valu e o l shipments (1987$ ) 58 5 - 55 7 52 4 50 5 -4. 8 -5. 9 -3. 6 Tota l employmen t (000 ) 11. 0 10. 9 - -0. 9 Productio n worker

s (000 ) 9. 2 9. 1 - - -1. 1 Averag e hourt

y earning s (S

) 6.2 2 6.3 0 - - 1. 3 Produc t Dat a Valu e o f shipments ' 53 6 54 1 - - 0. 9 Valu e o f shipments (1987$ ) 53 6 51 5 51 0 49 5 -3. 9 -1. 0 -2. 9 Trad e Dat

a Valu e o f import s 34 7 45 1 40 9 - 30. 0 -9. 3 Import/new suppl y ratio ' 0.39 3 0.45 5 - - 15. 8 Valu e o f export s 13. 9 12. 5 10. 1 - -10. 1 -19. 2 Export/shipments rati o 0.02 6 0.02 3 - - -11. 5 - ; 'Industr y an d produc

t data ar e preliminary
. Trad e dat

a ar e adjuste d t o confor m t o th e 1987 "Valu e o f products classifie d i n th e rubbe ran d plastics footwea rindustr y produce d b

y al l SIC
. industries
. ^Estimated , excep

t fo rexports an d imports
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. SEstimated
. > SOURCE : U.S
. Departmen t o f Commerce : Bureau o

f th e Census : Internationa l Trad e Admlnlstre forecast
. tio n (ITA)
. Estimate s an d forecast s by ITA
. syaiu e o f al l product

s an d service s sol d b

y establishment

s i n th e rubbe ran d plastic s footwea r U.S
. Industria l Outloo k

1990—Plastics an d Rubbe r 

## 14- 5P.1 6

Trend s an d Forecasts : Adhesive s an d Sealant s (SI C 2891 ) (i n million s o

f dollar s excep

t a s noted ) Percen t Chang e | ^ 1987 ] 1988 2 1989 ] 1990 4 1987-8 8 1988-8 9 1989-9 0 Industry Dat a Valu e o f shipments ' 4,68 5 5,15 4 5,51 4 - 10. 0 7. 0 Valu e o f shipment s (1987$ ) 4,68 5 4,86 2 5,10 6 5,46 2 3. 8 5. 0 7. 0 Tota l employmen t (000 ) 21. 0 21. 1 21. 1 - 0. 5 0. 0 Productio n worker s (000 ) 11. 9 11. 9 12. 0 - 0. 0 0. 8 Averag e hourl y earning s ($ ) 10.5 6 10.7 0 11.1 2 - 1. 3 3. 9 Produc t Dat a Valu e o f shipments ' 4,51 0 4,96 2 5,30 1 - 10. 0 6. 8 Valu e o f shipment s (1987$ ) 4,51 0 4,68 1 4,95 4 5,25 7 3. 8 5. 8 6. 1 Trad e Dat a Valu e o f import s 10 5 99. 4 12 8 13 7 -5. 3 28. 8 7. 0 Import/ne wsuppl y ratio 7 0.02 9 0.01 8 0.02 2 - -37. 9 22. 2 Valu e o f export s 12 9 16 9 15 5 16 9 31. 0 -8. 3 9. 0 Export/shipment s rati o 0.03 7 0.03 2 0.02 7 - -13. 5 -15. 6 - 'Industr y an d product dat a ar e preliminary . Trad e dat a ar e adjuste d t o confor m t o th e 198 7 'Valu e o f al l product s an d service s sol d b y establishment s i n th e adhesive s an d sealant s SIC . industry . Estimated , excep t fo r export s an d imports . 'Valu e o f products classifie d i n th e adhesive s an d sealants industr y produce d b

y al l Industries . 'Estimated . 'Ne wsuppl y i s import s plu s correspondin g product shipments , •forecast . SOURCE : U.S . Departmen t o f Commerce : Burea u o

f th e Census : Internationa l Trad e Administratio n (ITA) . Estimate s an d forecast s by ITA . industry' s inabilit

y t o satisf y domesti c demandfo

r certai n pro duc t lines . I n 1988 , th e bul

k o f import s cam

e fro mWes t Ger

many , wit h a26. 5 percent

share , followe

db y Japa n (26. 3 per

cent) , Canad a(12. 1 percent) , th e Unite dKingdo m(8. 6 percent) , an dSwitzerlan d(4. 4 percent) .

Outloo k fo r 199 0 Industr y shipment s o f

adhesive s an d sealant s i n 199 0 ar e expecte dt o grow faste

r tha n th e econom

y a s awhol e i n respons e t o vigorou s deman dfro mth e aerospace , aviation , automotive , an dpackagin g industries . Growth in th e non research-intensiv e products , o n th e othe r hand , wil l mos t pro babl y la g behin da s aresul t

o f aslowdow n in constructio n activity . Long-Ter m Prospects Internationa l competitio n i n bot h domesti c an dforeig n market s wil

l probably continu e t o b e intens e fo r U.S . adhesive s an dsealant s firms ove

r th e nex t 5-1 0 years . Th e industr

y face s stron g competitio n fro

mth e European s an dth e Japanes e i n th e high-technolog y are ao f specialt y adhesives . Recen t development s i

n adhesive s technolog y suc h a s bondin g o f metal-to-polyme

r or plastic-to-plasti c surface s an dultraviole t radiatio n curin g wil

l reflect change s i n material s an dassembl

y method s use din th e automotiv e an daerospac e end-us e sectors . Th e market s fo r adhesive s usedt o replac e certai n surgica l procedures , th e so-calle

dbioadhesives , an dfo

r packag

in g wil l probabl y gro w withi n th e nex t 3- 5 years . Environmental legislatio n an dpubli c concer n over th e environmen t

wil l continu e t o driv e manufacturer s t o chang e produc t mix in th e foreseeabl e future . Domesti c manufac

turer s wit h sufficien

t resource s t o fac e th e growin g tren d towar d environmenta l legislatio n a tth e municipa l an d stat e levels , an dat

th e sam e tim e abl e t o expandin oversea s market s throug h joint-venture s o r

licensing , wil

l b e in apositio n t o surviv e throug h th e 1990s.— Raimund o M. Prat, Office of Chemical and Allied Products, (202) 377-0128, September 1989. Additiona l Reference s "Paint s and Allie d Products, " SI C 2851 , "Adhesive s and Sealants, " SI C 2891 , Annual Survey of Manufactures, 1983 , Burea u o f th e Census , VS. Depart

men to f Commerce , Washington , D C 20233 . "Paints an d Allie d Products, " SI C 2851 , 1987 Census of

Manufactures MC87I-28E(P) , "Miscellaneou s Chemica l Products" , Serie s MC87-I-28H(P) , Issue d Apri l 1989 , Burea u o f th e Census , U.S . Depart men to f Commerce , Washington , D C 20233 . "Curren tIndustria l Reports : Paint, " Burea

u o f th e Census , U.S . Departmen t o f Commerce , Washington , D C 20233 . American Paints and

Coatings Journal, 291 1 Washingto n Avenue , St . Louis , M O 63103 . Adhesive Age Magazine, 625 5 Barfiel d Road , Atlanta , G A 30328 .



### 15- 4 U.S
. Industria l Outloo k 1990—Coating s an d Adhesive sP.1 7 Trend s an d Forecasts : Soap , Cleaners , an d Toilet Good s (SI C 284 ) (i n million s o f dollar s excep t a s noted ) Percen t Chang e lte m 1987 ] 198J P 1989 J 1990 * 1987-8 8 1988-8 9 1989-9 0 Industr y Data Valu e o f shipments ' 34,42 7 37,18 0 39,67 5 - 8. 0 6. 7 284 1 Soa p & othe rdetergent s 11,51 0 12,64 5 13,30 3 - 9. 9 5. 2 284 2 Polishes/sanitatio n good s 5,51 4 5,84 9 6,33 9 - 6. 1 8. 4 284 3 Surfac e activ e agent s 2,98 0 3,37 6 3,82 9 - 13. 3 13. 4 284 4 Toile t preparation s 14,42 4 15,31 0 16,20 4 - 6. 1 5. 8 Valu e O f shipment s (1987$ ) 34,42 7 35,37 6 36,61 5 37,72 5 2. 8 3. 5 3. 0 284 1 Soa p S

i othe rdetergent s 11,51 0 11,79 6 12,18 2 12,42 3 2. 5 3.3 2. 0 284 2 Polishes/sanitatio n good s 5,51 4 5,62 4 5,76 3 5,89 7 2. 0 2. 5 2. 3 284 3 Surfac e activ e agent s 2,98 0 3,12 0 3,26 7 3,43 0 4. 7 4. 7 5. 0 284 4 Toile t preparation s 14,42 4 14,83 5 15,40 3 15,97 5 2. 8 3. 8 3. 7 Tota l employmen t (OOO

) 11 9 12 5 12 5 12 6 5. 0 0. 0 0. 8 284 1 Soa p & othe rdetergent s 31. 4 31. 8 30. 9 31. 1 1. 3 -2. 8 0.6 284 2 Polishes/sanitatio n good s 20. 3 21. 4 22. 1 22. 8 5. 4 3. 3 3. 2 284 3 Surfac e activ e agent s 8. 9 9. 4 9. 7 10. 0 5.6 3. 2 3. 1 284 4 Toile t preparation s 58. 4 62. 6 61. 9 62. 0 7. 2 -1. 1 0. 2 Productio n worker s (000 ) 72. 2 75. 7 76. 1 77. 4 4. 8 0. 5 1. 7 284 1 Soa p & othe rdetergent s 19. 2 19. 5 19. 0 19. 2 1. 6 -2. 6 1. 1 284 2 Polishes/sanitatio n good s 13. 0 13. 8 14. 4 15. 0 6. 2 4. 3 4. 2 284 3 Surfac e activ e agent s 4. 6 4. 9 5. 1 5. 4 6. 5 4. 1 5. 9 284 4 Toile t preparation s 35. 4 37. 5 37. 6 37. 8 5. 9 0.3 0. 5 Averag e hourl y earning s ($ ) 10.6 7 10.9 2 10.9 1 - 2. 3 -0. 1 284 1 Soa p & othe rdetergent s 13.8 0 14.3 1 14.3 5 - 3. 7 0. 3 284 2 Polishes/sanitatio n good s 9.8 8 10.0 2 9.9 9 - 1. 4 -0. 3 284 3 Surfac e activ e agent s 13.4 0 13.6 0 13.5 7 - 1. 5 -0. 2 284 4 Toile t preparation s 8.8 7 9.0 2 9.0 0 - 1. 7 -0. 2 Produc t Data Valu e o f shipments ' 32,22 8 34,91 5 37,19 0 - 8. 3 6. 5 284 1 Soa p & othe rdetergent s 9,57 2 10,51 6 10,98 0 - 9. 9 4. 4 284 2 Polishes/sanitatio n good s 5,09 0 5,40 0 5,85 2 - 6. 1 8. 4 284 3 Surfac e activ e agent s 2,83 6 3,21 4 3.65 1 - 13. 3 13. 6 284 4 Toile t preparation s 14,73 0 15,78 5 16,70 7 - 7. 2 5. 8 Valu e o f shipment s (1987$ ) 32,22 8 33,26 7 34,36 5 35,49 0 3. 2 3. 3 3. 3 284 1 Soa p & othe rdetergent s 9,57 2 9,81 0 10,05 5 10,31 0 2. 5 2. 5 2. 5 284 2 Polishes/sanitatio n good s 5,09 0 5,19 2 5,32 0 5,45 0 2. 0 2. 5 2. 4 284 3 Surfac e activ e agent s 2,83 6 2,97 0 3,11 0 3,26 0 4. 7 4. 7 4. 8 284 4 Toile t preparation s 14,73 0 15,29 5 15,88 0 16,47 0 3. 8 3. 8 3. 7 Trad e Data Valu e o f import s 73 4 86 3 1,07 6 1,23 1 17. 6 24. 7 14. 4 284 1 Soa p & othe rdetergent s 82. 5 84. 2 86. 0 88. 0 2. 1 2. 1 2. 3 284 2 Polishes/sanitatio n good s 34. 4 35. 9 40. 0 43. 0 4. 4 11. 4 7. 5 284 3 Surfac e activ e agent s 17 1 22 5 30 0 35 0 31. 6 33. 3 16. 7 284 4 Toile t preparation s 44 6 51 8 65 0 75 0 16. 1 25. 4 15. 4 Import/ne w suppl y ratio ' 0.02 3 ----- - 284 1 Soa p & othe rdetergent s 0.00 6 ----- - 284 2 Polishes/sanitatio n good s 0.03 5 ----- - 284 3 Surfac e activ e agent s 0.05 7 0.06 5 0.07 6 - 14. 0 16. 9 284 4 Toile t preparation s 0.02 9 0.03 2 0.03 7 - 10. 3 15. 6 Valu e o f export s 81 9 99 3 1,17 0 1,34 5 21. 2 17. 8 14. 6 284 1 Soa p & othe rdetergent s 14 4 13 4 14 0 14 5 -6. 9 4. 5 3. 6 284 2 Polishes/sanitatio n good s 89. 3 11 3 14 0 16 0 26. 5 23. 9 14. 3 284 3 Surfac e activ e agent s 20 2 24 4 29 0 35 0 20. 8 18. 9 20. 7 284 4 Toile t preparation s 38 4 50 2 60 0 69 0 30. 7 19. 5 15. 0 Export/shipment s rati o 0.02 5 0.02 8 0.03 1 - 12. 0 10. 7 284 1 Soa p & othe rdetergent s 0.01 5 0.01 3 0.01 3 - -13. 3 0. 0 284 2 Polishes/sanitatio n good s 0.01 8 0.02 1 0.02 4 - 16. 7 14. 3 284 3 Surfac e activ e agent s 0.07 1 0.07 6 0.07 9 - 7. 0 3. 9 284 4 Toile t preparation s 0.02 6 0.032 0.03 6 - 23 J 12J > - 'Industry an d product data ar e preliminary
. Trad e dat a ar e adjuste d t o confor m t o th e 1987 SIC
. 'Valu e o f product s classifie d i n th e soap , cleaners , an d toile t good s industry produce d b y 'Estimated , excep t fo rexport s an d imports
. al l industries
. 'Estimated
. ' N e wsuppl y i s import s plu s correspondin g produc t shipments
. 'Forecast
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census : Internationa l Trad e svalu e o f al l product s an d service s sol d b y establishment s i n th e soap , cleaners , an d toile t Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. good s industry
. Th e increasin g ban s o n us e o f phosphate s in laundry Outloo k fo r 199 0 detergent s wil

l spu r th e us e o f enzymes , whic h ai dth e clean

- „„„•• « in g pfocess . A n industr

y estimat e ha s tri e us e o

f enzyme s i n . Produc t shipment s o

f soap s an ddeergent s ar e forecas t to laSndr y detergent s growing a t

an annua l rat e o

f 1 6 percent . '"creas e 2 5 percen t (constant dollars ) i n 1990 . Th e valu e o f Proteas e fo

r protei n breakdow n ancPamylas e fo r starc h export s i s forecas t t o increas e abou t

3. 6 percent

while import s breakdow n accoun t

fo r th e greates t

proportion.o f

enzyme s chm b minimally . usedi n laundr

y detergents . However , us e o f lipas e fo r fa t Shipment s o

f liqui dlaundry detergent s ar e expecte dt o ris e breakdow n an dth e other

enzyme s neede dfo

r complet e clean

- anothe r

1 6 percen t

t o $ 1. 8 billio n i n 1990 , an drapi dgrowt h in g i s expecte dt o increas e a t afas t pace . o f abou t 2 1 percent

i s see n fo r us e o f dishwashe

r liquids , bot

h 37_ 2 U.S
. Industria l Outloo k 1990—Cleaner

s an d CosmeticsPJ 8

institutional an dhousehold . Furthe r improvement s wil

l be pad e in dispensin g o

f liqui ddetergents . Consumer s als o wil l mak e greate r us e o f unit dosage packets , whic

h heretofor e hav e bee n slo w t o catc h th e market' s fancy , an do f detergent s con tainin g fabri c softeners . Highe r cost s fo r ingredient s suc h a s surfactant s ar e forcin g reformulatio n o

f detergent s t o improv

e cost/performanc e characteristics . Enzyme s i

n detergent s ar

e bein g improvedt o lowe r cost s an denhanc e stabilit y i n conjunctio n wit

h newl y develope doxyge n nonchlorin e bleachin g compounds . Shipment s o

f liquidsoap s ar

e expectedto reach $16

0 million i n 1990 , u p 5. 4 percent

fro m1989 . Ne

w development s suc h a s multifunctiona

l liqui dsoap s containin g moisturizer s an d antibacterial s have shown goodtrial results .

Long-Ter m Prospect s Constant-dolla

r produc t shipment s ar

e projectedt o gro

w at a n averag e rate o

f 2. 5 percen

t annuall y throug h 1994 . Heavy

dut y liqui dlaundr

y detergent s ar

e see n gainin g ove

r 4 0 percen t o f th e heavy-dut

y laundr y detergent

marke t b y 1994 , compare dwit

h abou t 3 0 percent

currently , becaus e o

f th e increasedrestrictio n on us e o f phosphate s in detergents . (Liquids ar e mor e popula r in area s wher

e phosphate s have bee

n restricted) . Detergent s containin g nonchlorin e bleache s suc h a s perox yge n bleache s wil

l eventuall y replac e chlorin e bleaches . Researc h i s going on to activat

e peroxyge n bleache s effectivel

y at lo w wash-wate

r temperatures , thu s extendin g thei r us e t o mos t launderin g situations . Acrylat e polymer s an dcopolymer s ar e becomin g increas

ingl y usefu l fo r processing , anti-redeposition , detergency , an d improvemen

t o f phosphate-replacement

builders . Development s in detergen

t additive s promis e t o reduc e th e potentia l fo r buildup o f engin e carbo n deposits . Consumptio n o f gasoline additives , includin g detergents , i s expectedt o gro w b y abou t 7 percent ayea r throug h 1994 , whe n i t

wil l total abou t $15 0 million . 

### (POLISHE S AN D SANITATIO N GOOD S Industr y shipment s o

f polishe s an dsanitatio n good s (SI C 2842 ) totale dan estimate d$6.3 4 billio n i n 1989 , an increas e o f 8. 4 percent

ove r 1988 . I n constan t dollars , th e growt

h rat e wa s 2. 5 percent . Export s in 198 9 ar

e estimate dt o have increase dt o $14 0 million , 24 percent

above th e 198 8 value . Import s increase d abou t 1 1 percent

t o $40 million . Average earning s o

f productio n worker s ar

e estimate dt o have hel dstead

y in 1989 , at

$1 0 an hour , whil e tota l employ

ment ros e 3. 3 percent . Productivit y decline dabou t

2 percent , an dprice s increase d5. 8 percent . Th e keynot

e i n thi s industr

y i s convenience . Manufacturer s ar e producin g multipurpos e product s becaus e consumer s wis h t o decreas e th e amoun t

o f time spent

o n housework . Us e o

f multipurpos e product s cut s cleanin g tim e fro mbus y schedule s an di s les s expensiv

e than using severa

l single-purpos e product s t o achiev e th e sam

e results . Th e institutiona l an dindustrial (I&I ) sector o f th e clean

ing industr

y consume s asignifican

t portio n o

f polishe s an d sanitatio n goods . A leading chemica l trad e journa l estimate s th e I& I marke t

target s 38,00 0 hotel s wit

h 3 millio n rooms ; 400,00 0 restaurants ; 7,00 0 hospital s wit h 1. 1 millio n beds ; 17,00 0 nursin g home s wit

h 2 million beds ; 2 millio n offic e buildings ; 2 millio

n retail establishments ; thousand s o f schools ; an d400,00 0 foo

dprocessing plants . I& I manufacturer s ar

e mainl y small , keenl

y competitiv e regiona l companies , whic h produc e som e 50,00 0 differen

t brand s o f products . I n 1988 , they usedmor e tha n $3. 5 billio n wort h o f chemical s an dove

r 4 billion pound s o

f detergents . Mor e tha n 2,00 0 manufacturer s produc e I&I cleaners . I&I producer s ar

e payin g greate

r attentio n t o environmen

tal safety . Th e industry ha s been affecte db y increase dregula

tio n an dpublicit

y concernin g labeling an ddisclosure , protec tio n o f th e environment

fro mvolatil e organi c chemicals , an d us e o f biodegradabl e products . Growt h o f onl y abou t

1. 7 percent ayea r characterize s th e marke t fo r disinfectants , whic h ar

e necessar y fo r prope r clean

ing an dprotection , especiall y i n hospital s an dnursin g homes . Extensiv e regulatio n o

f thi s sector

i s discouragin g productio n an dforcing th e withdrawa l o f margina l producers . Specialt

y biocide s use di n formulatin g disinfectant s are quaternarie s (wit h 5 5 percent

o f th e volum

e o f sale s t o disinfectant s industries) , chloroisocyanate s (3 0 percent) , an dphenolic s (1 5 percent) . Outloo k fo r1990 Th e constant-dolla

r valu e o f produc t shipment s i s expecte d t o ris e 2. 5 percent

in 1990 . Tota

l employmen

t i s forecas t

t o increas e 3. 2 percent

t o 22,80 0 while th e number o f produc

tio n worker s increase s 4. 2 percent t o 15,000 . Productivit

y i s expectedt o decreas e slightly . Export s i n 1990 ar

e expecte dt o clim

b t o $16 0 million , 1 4 percent abov e 1989 . Import s ar

e forecas t at $4 3 million , u p 7. 5 percent . Long-Ter m Prospect s Industr y shipment s o

f polishe s an dsanitatio n product s are projecte dt o gro w a t an average annual rat

e o f 2. 4 percen

t (con

stan t dollars ) throug h 1994 . Producer s ar e aimin g a t

supplyin g th e publi c wit

h polishe s an dsanitatio n good s tha t

ar e efficient , convenient , eas y to use , time an denerg y savers , an dreasonably priced . I n th e cas e o f sanitatio n products , producer s ar e attemptin g t o satisf

y deman dfo

r product s tha t

remove adiversit

y o f soil s fro ma variet y o f surfaces . On e industr

y exper t forecast s stron g deman dfo

r product s tha t

have multipl e function s an dar e easil y dispensed . Th e market

wil l b e affecte

db y populatio n increase s amon g th e olde

r generatio n an dyoun g adults , a decreas e i n th e averag e househol dsize , an da n increas e in th e number o f two-incom

e housholds . 

### SURFACE-ACTIV E AGENTS Surface-active agent s (SI

C 2843) , know

n a s surfactants , ar

e organi c chemical s tha t

reduc e surfac e tensio n an dthereb y loose n an dsuspen ddir

t deposit s an dstain s s o tha t wate r ca n wash the maway . Worldwid e surfactant

consumptio n i s estimate dat

15. 5 billion pound s annually , almos t hal f o f whic h i s consume din th e Unite dStates . Consumptio n i s dividedint o thre e major

sectors : I& I cleaners ; househol dproducts , an d personal-car

e products . US . production o

f surfactant s i

n 198 9 is estimateda

t 8 billio n pounds , compare dwit

h 7. 3 billion i

n 1988 . Abou t

athir do f th e productio n goe s int o th e manufactur e o f detergents . Mos t U.S
. Industria l Outloo k

1990—Cleaner

s an d Cosmetics 

### 37- 3P.1 9 

# r

of

thcremainde r

goe s int o emulsifier

s an dwettin

g agents . Tw

o o f th e most-usedan

dversatile surfactant s wit

h goo dcleanin g qualitie s ar

e linea r alkylbenzen

e sulfonat e (LAS) an

dlinea r alcoho l ethoxylat

e (AE) . Surfactant s ar

e classifie di n term s o f electrica l charge o f th e molecule . Anionic s suc

h a s LJ-\ S have anegativel

y charged hydrophyllic grou

p an drepresen t mor e tha n hal f o f al l surfac

tant s used . Nonionic s suc

h a s A E ar e neutra l i n electrica l charge . Amphoteric s suc

h a s betaine s hav

e acharge tha

t varie s accordin g t

o th e aci dconten t i n formulation . Surfactant shipment s i

n 198 9 ar e estimate da

t abou t $3.6 5 billion , 13. 6 percen

t ove r 1988 . Rea l gai n i n bot h industr y an d produc t shipment s is estimatedabout 5 percent . Surfactan

t export s i n 198 9 ros e abou t

1 9 percen

t t o an estimate d$29 9 million . Import s ar

e estimate da

t $300 million , a

n increas e o

f 3 3 percent . Price s increase dabou t

5. 8 percen

t i n 1989 . Tota

l employ

men t increased3. 2 percent , an

dth e numbe

r o f production workers ros e a

n estimate d4 percent . Productivit y increased significantly . Th e surfactant s industr

y i s operatin g a

t o r nea r capacity , althoug h marke

t growt h ha s slowe

dsomewha

t i n the past fe w years . Inventorie s recentl

y hav e bee n reduced , afte

r bein g expande dt o protec t

agains t shortages . Intermediate s fo

r th e productio n o

f surfactant s appea

r t o b e i n plentifu l supply . Thi s is partly becaus e sale s o f liquids , whic h contai n mor

e surfactan

t than d o powders , have no t increaseda s much a

s expected . Outloo k fo r 199 0 Th e value s o

f bot h industr y andproduct

shipment s ar

e forecast t o increas e nearl

y 5 percen t i n 1990 , afte

r adjusting fo r pric e change . Productivit

y is expecte

dt o decreas e slightly . Th e value o

f export s is expecte

dt o increas e 2 1 percen

t t o $35 0 millio

n i n 1990 . Impor

t valu e wil l clim b about 17 percen t t o $35 0 million . Th e market

wil l b e gettin g ane

w andwide

r rang e o f surfactants fo r specifi c applications . Specialt

y surfactants wil

l offe r th e greates t

opportunitie s fo

r growth . Fo

r example , ne

w specialt y nonionic s fo

r us e i n dishwashing liquids wil

l produc e superior mildnes s an

dbiodegradability . Price s fo r ethylene-base

dsurfactants ar

e expecte dt o continue t o declin e i n 199 0 a s aresult

o f expansio n i n ethylen e produc

tion . Th e tightenedprofi

t margin s couldcaus e som

e firms, especiall y smalle r ones , t o sto p manufacturing surfactants . Long-Ter m Prospect s Th e rea l valu e o f industr y shipments is projecte

dt o increas e a t arate o f 3. 8 percen t ayea r throug h 1994 . B y then , anionic s are forecast

t o compris e 6 0 percen

t o f th e total , dow

n fro m 62 percen t i n 1988 . Nonionics ' shar

e is expecte

dt o increas e t o 3 2 percen

t fro m2 7 percen t i n 1988 . 

### COSMETIC S Th e cosmetic s (toile

t goods ) industr

y (SI C 2844 ) consist s o f thre e majo

r categories : cosmetics , fragrances , an dtoiletries . Th e valu e o f product shipment s i

n 198 9 i s estimateda

t $16. 7 billion , u p 5. 8 percen

t fro m198 8 (3. 8 percen

t i n constan t dol

lars) . Export s i

n 1989 rose a

n estimate d2

0 percen t t o $60 0 million . Import s wer

e about $65 0 million , 2

5 percen t ove r 1988 . Productivit y increaseda

n estimate d3. 5 percen

t i n 1989 , Employmen

t wa s fairl y stable , a s wer

e production workers ' average hourly earnings . Th e average ne

t profit , afte

r taxes , wa s a n estimate d6 percen

t i n 1989 . Althoug h on e o f the bes t self-regulate

dindustrie s i

n th e past, th e cosmetic s industry , i

n cooperatio

n wit h the Foo dan dDru g Administration , i s placin

g eve n mor e emphasi s o

n self , regulation. Evaluatio n o

f ingredient s is improving , an d awarenes s is increasin

g amon g cosmetician s an

dcosmetologist

s o f the saf e andoptimu

muse o f cosmetic s andhair-car

e products . Cosmetic s ar

e becomin g high-tec h products . Researc

h an d developmen

t is aime dprimaril y a t ski n car e andprotection , a s wel l a s minimizing an

y allergic responses t o ingredients . Th e skin

- andhair-car

e market s ar

e th e largest

segments o f th e cosmetic s industry . Th e valu e o f skin-car e product shipments , spurre db

y sale s o f sun-car e products , ha s bee

n growin g a t a n annual rat

e o f 12 percen

t sinc e 198

2 andi s estimate dt

o hav e reached $2. 8 billio

n i n 1989 . Shipment s o

f sun-car e product s hav

e bee n growin g b y mor e tha n 1 6 percen t ayea r andshouldhav

e reache d$20 5 millio

n i n 1989 . Hair-car e products , increasin

g mor e tha n 8 percen t ayear , ar e estimate da

t $4. 2 billio

n fo r 1989 . Th e ethni c marke

t fo r product s designedspecificall y fo r darke r ski n andspecia

l hai r car e i s growin

g faste r tha n th e rest o f the cosmetic s market . Shipment s i n 1989 ros e about

ChMWOuQh-Pw d rase about 3.8percent

in 1989and

are expected

to gain another

3.7 percent in 1990. Constant dollar shipments of

toilet goods, including toothpaste, rose about

ther' ' 

### 37- 4 U.S
. Industria l Outloo k 1990—Cleaner s an d Cosmetic sTrend s an d Forecasts : Drug s (SI C 283 ) (i n million s o f dollar s excep t a s noted ) Ite m 1987 ' Industr y Dat a Valu e o f shipments ' 39,09 0 283 3 Medicinal s & botanical s 3,34 8 283 4 Pharmaceutica l prep s 32,07 0 283 5 Diagnosti c substance s 2,08 3 283 6 Bi o pro d e

x diagnosti c 1,58 9 Valu e o f shipment s (1987$ ) 39,09 0 283 3 Medicinal s & botanical s 3,34 8 283 4 Pharmaceutica l prep s 32,07 0 283 5 Diagnosti c substance s 2,08 3 283 6 Bi o pro d e

x diagnosti c 1,58 9 Tota l employmen t (000 ) 17 0 283 3 Medicinal s & botanical s 11. 6 283 4 Pharmaceutica l prep s 13 2 283 5 Diagnosti c substance s 14. 1 283 6 Bi o pro d e

x diagnosti c 12. 8 Productio n worker s (000 ) 79. 1 283 3 Medicinal s & botanical s 6. 1 283 4 Pharmaceutica l prep s 59. 8 283 5 Diagnosti c substance s 6. 7 283 6 Bi o pro d e

x diagnosti c 6. 5 Averag e hourl y earning s ($ ) 12.2 5 283 3 Medicinal s & botanical s 15.4 8 283 4 Pharmaceutica l prep s 12.4 1 283 5 Diagnosti c substance s 10.7 8 283 6 Bi o pro d ex diagnosti c 9.0 3 Produc t Oata Valu e o f shipments 6 35,05 4 283 3 Medicinal s & botanical s 4,22 2 283 4 Pharmaceutica l prep s 26,47 5 283 5 Diagnosti c substance s 2,62 1 283 6 Bi o pro d e

x diagnosti c 1,73 6 Valu e o f shipment s (1987$ ) 35,05 4 283 3 Medicinal s & botanical s 4,22 2 283 4 Pharmaceutica l prep s 26,47 5 283 5 Diagnosti c substance s 2,62 1 283 6 Bi o pro d e

x diagnosti c 1,73 6

Trad e Data Valu e o f import s 2,79 5 283 3 Medicinal s & botanical s 2,46 8 283 4 Pharmaceutica l prep s 16 4 283 5 Diagnosti c substance s 0. 0 283 6 Bi o pro d e

x diagnosti c 16 4 Import/ne w suppl y ratio 7 0.07 4 283 3 Medicinal s & botanical s 0.36 9 283 4 Pharmaceutica l prep s 0.00 6 283 5 Diagnosti c substance s 0.00 0 283 6 Bi o pro d e

x diagnosti c 0.03 6 Valu e o f export s 3,22 9 283 3 Medicinal s & botanical s 1,98 2 283 4 Pharmaceutica l prep s 67 6 283 5 Diagnosti c substance s 0. 0 283 6 Bi o pro d e

x diagnosti c 57 1 Export/shipment s rati o 0.09 2 283 3 Medicinal s & botanical s 0.46 9 283 4 Pharmaceutica l prep s 0.02 6 283 5 Diagnosti c substance s 0.00 0 283 6 Bi o pro d ex diagnosti c 0-13 1 'Industr y an d produc t dat a ar e preliminary
. Trad e dat a ar e adjuste d t o confor m t o th e 198 7 SIC
. ^Estimated , excep t fo rexport s an d imports
. 'Estimated
. 'Forecast
. Percen t Chang e 1988 ' 1989 3 1990 * 1987-8 8 1988-8 9 1989-9 0 43,09 1 3,72 1 35,50 0 2,19 6 1,67 4 40,50 3 3,42 3 33,24 0 2,18 7 1,65 3 17 2 12. 4 13 3 14. 4 13. 1 80. 7 6. 5 60. 5 7. 0 6. 7 12.5 5 15.9 0 12.7 2 11.0 5 9.3 0 38,34 4 4,69 8 29,06 6 2,75 7 1,62 3 36,08 3 4,32 2 27,21 5 2,74 6 1,80 0 3,48 5 3,05 6 19 9 0. 0 23 0 0.08 3 0.39 4 0.00 7 0.00 0 3,93 4 2,46 3 85 8 0. 0 61 4 0.10 3 0.52 4 0.03 0 0.00 0 46,77 4

3,92 8 38,78 1 2,31 8 1,74 7 41,88 7 3,50 1 34,35 0 2,31 8 1,71 8 17 6 13. 2 13 4 15. 2 13. 4 82. 0 6. 9 61. 1 7. 3 6. 7 12.8 8 16.3 0 13.0 6 11.3 4 9.6 0 41,51 6 5,11 6 31,58 4 2,91 0 1,90 6 37,18 5 4,42 6 27,97 5 2,91 0 1,87 4 4,45 4 3,84 9 25 0

- 30 0 0.09 7 0.42 9 0.00 8

- 4,68 1 2,96 3 1,00 0

- 66 0 0.11 3 0.57 9 0.03 2

- -

-

-
-

- 43,33 8 3,57 5 35,50 0 2,48 0 1,78 3 17 9 14. 0 13 5 15. 6 13. 7 83. 1 7. 2 61. 6 7. 5 6. 8

.
-
-
-
-

_

-

-
-
- 38,25 4 4,53 7 28,70 2 3,07 0 1.94 5 5,32 1 4,62 0 30 0

. 34 0

_ -
-

- 5,55 3 3,57 0 1,20 0

- 72 0

-

-
-
- 10. 2

11. 1 10. 7 5. 4 5. 3 3. 6 2. 2 3. 6 5. 0 4. 0 1. 2 6. 9 0. 8 2. 1 2. 3 2. 0 6. 6 1. 2 4. 5 3. 1 2. 4 2. 7 2. 5 2. 5 3. 0 9. 4 11. 3 9. 8 5. 2 5. 0 2. 9 2. 4 2. 8 4. 8 3. 7 24. 7 23. 8 21. 3 40. 2 12. 2 6. 8 16. 7
21. 8 24. 3 26. 9 7. 5 12. 0 11. 7 15. 4 8. 5

5. 6 9. 2 5. 6 4. 4 3. 4 2. 3 3. 3 6. 0 3. 9 2. 3 6. 5 0. 8 5. 6 2. 3 1. 6 6. 2 1. 0 4. 3 0. 0 2. 6 2. 5 2. 7 2. 6 3. 2 8. 3 8. 9 8. 7 5. 5 4. 6 3. 1 2. 4 2. 8 6. 0 4. 1 27. 8 25. 9 25. 6 30. 4 16. 9 8. 9 14. 3
19. 0 20. 3 16. 6 7. 5 9. 7 10. 5 6. 7 3. 5

2. 1 3. 3 7. 0 3. 8 1. 7 6. 1 0. 7 3. 9 2. 2 1. 3 4. 3 0. 8 2. 7 1. 5

2. 9 2. 5 2. 6 5. 5 3. 8 19. 5 20. 0 20. 0 13. 3

1 8 6 201 ) 2 0 0 9 1

'Valu e o f al l product s an d service s sol d b y establishment s i n th e drug s industry
. 'Valu e o f product s classifie d i n th e drug s industry produce d b y al l industries
. 'Ne w suppl y i s import s plu s correspondin g produc t shipments
. SOURCE : U.S
. Departmen t o f Commerce : Burea u o f th e Census ; Internationa l Taf r Administratio n (ITA)
. Estimate s an d forecast s b y ITA
. Outloo k fo r 1990 Th e valu e o

f medicina l an dbotanical produc t

shipment s i s forecas t t o increas e 2. 5 percent , i

n constan t dollars , in 1990 . Tota l employmen

t wil l ris e t o 14,000 , wit

h productio n workers numberin g 7,200 . Export s ar e expecte dt o ris e 20. 5 percent , t o $3. 6 billion , whil e import s will increas e 2 0 percent , t o $4. 6 billion . Th e negativ e trad e balanc e wil l continu e t o rise , bu t a t amor e moderat e rate . Long-Ter m Prospects Th e constant-dolla

r o f valu e shipment s o

f medicinal s aru

i botanical s i s forecast

t o increas e 2. 2 percen

t ayea r fo r the nc M 5 years . Som e industr y expert s believe tha t

a s mor e produc t patentexpire , w e ma

y see th e origina

l paten t holder s begi

n produ i in g medicina

l chemicals , formerly covere dunder th e P r0CJ| ^ patents , fo

r sale t o generi c formulators . Thi s ma y incrw s l 

### 50- 2 U.S
. Industria l Outloo k 1990—Drug s