The strong growth in 1994 for the U.S. economy pushed growth for the Top 50 chemicals into early 1995. Housing starts slid in 1995, and motor vehicle production, robust in the first half of the year, leveled off. Exports saw significant gains in 1995, says Allen J. Lenz, director of economics at the Chemical Manufacturers Association. Although the U.S. gross domestic product rate of growth fell in 1995, overseas sales of U.S. production helped maintain the momentum. For 1996, exports are not likely to have as dramatic an impact on sales growth.
Basic chemicals look pretty strong, but the economic indicators are looking weak.
Inventories are at rock bottom. Maybe some demand will come from rebuilding inventories, some from exports. China, which has recently come back into the market, could boost export demand. With plastics making less notable gains in 1995 than 1994, chemicals destined for use in plastics had mixed results. N.Y. But, he says, improvements were noted in January and February.