Organic Chemical Manufacturing In The US Industry Market Research Report Now Available From IBISWorld

Revenue for the Organic Chemical Manufacturing industry has grown at a relatively strong, but volatile, pace during the past five years. Over the five years to 2017, revenue is set to improve, as downstream demand rises. Rising production and raw material costs will likely cut into profit, but overall growth will occur over the next five years due to growth in the construction sector and a rise in consumer spending. For these reasons, industry research firm IBISWorld has added a report on the Organic Chemical Manufacturing industry to its growing industry report collection.

Los Angeles, CA (PRWEB)  The Organic Chemical Manufacturing industry has expanded over the five years to 2012. The industry provides raw materials to different industries like plastic, paint and adhesive manufacturing, and is expected to increase at an annual average rate of 4.3% to $125.0 billion in 2012. Although the recession lowered demand from end-use customers that caused revenue to drop in 2009, the industry has benefited from increasing demand and consumer spending, with large jumps in revenue occurring before the recession set in. According to IBISWorld industry analyst Radia Amari, the economic downturn caused many of the industry's customers to reduce their production levels as consumer spending fell and the housing and construction sectors - key buying markets for the industry - declined. Additionally, changing raw material costs, including oil prices, which rose at an annualized rate of 8.2% over the five years to 2012, compressed industry margins. The economy began to recover in 2010, with higher manufacturing levels increasing demand for organic chemicals. In line with these trends, revenue in 2012 will increase 4.0%, as demand from customers strengthens. However, it will be limited by higher raw material prices in the form of oil. That said, higher selling prices that offset feedstock costs, together with increased demand for exports and a decline in establishments, will increase industry profit to 6.5% of revenue in 2012.

Over the five years to 2017, IBISWorld expects industry revenue to grow. Demand from key buying industries will expand, driven by higher consumer consumption and an increase in exports. "While industry revenue will increase, rising input costs and potential government regulation will put downward pressure on profitability," said Amari. Because of rising material and operating costs, companies will close underperforming plants and improve production facilities that make the cut. During this period, manufacturing facility numbers are expected to decrease.

The Organic Chemical Manufacturing industry has a low level of concentration, with the top four players accounting for less than 5.0% of industry revenue in 2012. According to the US Census Bureau, about 46.9% of industry companies have fewer than 20 employees, while 76.0% of companies have fewer than 100 employees. Additionally, low barriers to entry, including moderate technological change, will support a low market concentration over the next five years. However, the degree of concentration varies between different product segments. For example, within the gum and wood chemicals product segment, the top four companies account for over 80.0% of the market. For more information, visit IBISWorld's Organic Chemical Manufacturing in the US industry report page.

IBISWorld industry Report Key Topics

This industry manufactures basic organic chemicals (other than petrochemicals), industrial gases and synthetic dyes and pigments. Key product groups include gum and wood products, cyclic crudes and intermediates, ethyl alcohol and other basic organic chemicals. These products are predominantly intermediates that are used as raw material inputs by other manufacturing industries in the production of downstream products.

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About IBISWorld Inc.
Recognized as the nation's most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit www.ibisworld.com .

SOURCE: PRWeb

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