Key Trends to Impact the Chemical Enterprise in the Near Future

H. N. Cheng shares his perspectives and projections
Key trends in the chemical industry
Image credit: iStock by Getty Images

The chemical industry is a successful enterprise that employs a large number of people and has a significant impact on the global economy. In 2017, the chemical industry’s total contribution to global GDP was $5.7 trillion, equivalent to 7% of the world’s GDP that year (1). The total number of jobs supported by all aspects of global chemistry industry was 120 million (1).

Many readers of this newsletter may be interested to know the trends that will influence the chemical industry in the near future.  This article provides a summary of some of these trends, including a few perspectives related to their relevance.


The chemical industry has always been diverse and fragmented. It comprises a large number of industry groups, such as basic chemicals, resins/synthetic rubber/fibers, petrochemicals, plastics/polymers, agrichemicals, pharmaceuticals, biochemicals, paint/coatings/adhesives, cleaning/toiletries, instrumentation/lab equipment, and many others. Some of the products have become mature, while others are vibrant with growth potential. Increasing regulatory requirements, however, cause more scrutiny for new substances, and their approvals entail more time and money.

As investments, Wall Street expectations of the chemical industry have evolved since the 1990s. Increasingly, year-after-year growth in revenue/profit is emphasized. However, the traditional chemical business is more of a cyclical business and less of a growth business. Many large U.S. corporations have decreased their emphasis on basic research. Product development is often incremental, with a shorter-term focus. In this respect, it is helpful that many innovations take place in academic institutions, start-ups, and small businesses.

Furthermore, we live in changing times, with many influences affecting the chemistry enterprise. Currently, the global economy is facing inflation and supply chain problems. The war in Ukraine and Covid-related lockdowns in China are not helping matters. As noted by New York Times (2), companies are rethinking where to source their products and stocking up on inventory, even if that means lower efficiency and higher costs.

Another uncertainty is the price of crude oil. Since a lot of chemical products are based on fossil fuels, the price of crude oil has a large impact. In the past three years, crude oil price has fluctuated from $22 (April 2020) to $108 per barrel (June 2022). Increased oil prices will affect product cost and possibly profit. In fact, on June 7, the World Bank warned that “several years of above-average inflation and below-average growth seems likely.”  Companies face the difficult task of defending margins and cash flow. Possible strategies include cutting expenses and passing cost inflation on to customers without damaging sales volumes (3). Faced with a challenging fund-raising environment, start-ups and small businesses are also taking steps to extend their cash runway. 


According to American Chemistry Council (ACC), several economic growth drivers in the U.S. remain in place, including strong employment, healthy household and corporate balance sheets, and solid manufacturing growth (4). GDP is expected to grow by 2.8% in 2022 and 2.1% in 2023 after a 5.7% gain last year. Likewise, U.S. chemical output is robust, with growth across all chemical enterprises. After a 1.6% gain in 2021, the ACC expects output to grow by 4.1% in 2022 and expand 2.4% in 2023. Capital spending will jump 12.3% in 2022, to $34.5 billion, and 5.5% in 2023, to $36.4 billion (4). In the private sector, venture capital firms have raised $247B in January – May 2022 (5).

Another source of optimism is that there seems to be strong support for increased R&D funding. The U.S. National Science Board (NSB) report, Vision 2030, advocates for increased R&D budget, greater collaboration between academia and industry, and accelerated pace of innovation (6). Indeed, Congress is working to reconcile two pieces of legislation:  United States Innovation and Competition Act (USICA), passed by the Senate in June 2021, and America COMPETES Act, passed by the House in February 2022. If these are passed, more funding will be available for future research, STEM education, and sustainability efforts.

Impact of Sustainability

A major trend in chemistry enterprise is sustainability development. Chemical industry can play a major role in sustainability through innovative design, creation, processing, use, and disposal of substances (7). Certainly, the implementation of the 12 principles of green chemistry in chemical reactions and processes should be helpful.

The chemical industry has increasingly adopted various aspects of sustainability, and several major companies have announced their sustainability goals. However, industry faces some obstacles, including difficulty of plastics disposal, incomplete digital transformations, and complex supply chains (8). One example is greenhouse gas (GHG) emissions, as reported in C&EN (9). Customers of the chemical industry are demanding carbon reduction up and down the value chain. Yet, most chemical companies report upstream and downstream emissions, and few provide detailed reduction plans. Perhaps changing feedstocks is one powerful way chemical firms can reduce upstream emissions (9). 

Growing Sectors

According to ACC (4), basic chemicals will grow by 4.3% in 2022, with the largest gains in bulk petrochemicals and organics (4.6%), plastic resins (4.4%), and inorganic chemicals (4.4%). Specialty chemicals output will grow 6.2% in 2022, pulled by strong demand and restocking.

In the next few years, the areas of growth that have been cited by various sources include sustainability (e.g., GHG reduction, mandates to electric vehicles, alternative energy sources and fuels, biobased materials, and waste management), continued drug and agrochemical development, and innovative areas in 3D printing, biotechnology, nanotechnology, advanced materials, catalysis, quantum computing, electronics, artificial intelligence (AI) and digitization.

A somewhat different list has been provided by Accenture (10), comprising areas that attracted the most funding in 2018-2020: biotechnology, AI/machine learning, batteries, 3D printing, waste management, graphene/graphite, commodity chemicals, e-commerce, and quantum computing.

Job Outlook

According to U.S. Bureau of Labor Statistics (BLS), the chemical manufacturing sector (NAICS 325) employs 860,000 people, the plastics and rubber manufacturing sector (NAICS 326) employs 715,000 people, and the non-metallic mineral manufacturing sector employs 390,000 people (11). If other manufacturing sectors that partly involve chemistry are included (such as metals, automotive, and electronics), employment would be even higher. According to BLS, overall employment of chemists and materials scientists is projected to grow 6 % from 2020 to 2030, about as fast as the average for all occupations (11). Thus, the job outlook should be relatively stable in the near future.

Domestic and International Growth

Prior to 2000, U.S., Europe, and Japan were major players in the chemical market. In recent years, Asia is increasingly the major player in chemicals. According to Statista (12), the total number of industrial chemical jobs in the world in 2017 was 119 million. Asia Pacific (83 million) led all other areas, followed by Europe (19 million), North America (6 million), Latin America and the Caribbean (6 million), Africa and Middle East (5 million). In 2020 China alone made up more than 30% of the world’s supply and demand of chemicals (13).

Whereas international trade and commerce grew and flourished in the 1990s and 2000s, the pace stalled in the 2010s. In recent months, due to pandemic and the Ukraine war, the supply chain is being transformed, with build-up in inventories, dual sourcing, and longer-term contracts (2,14). Many governments and businesses decided to repatriate their production lines from abroad in order to be more resilient. This is happening particularly in the US, the UK, Europe and some Asian countries (14). It was noted that starting from 2025, 25% of world exports could be affected by the phenomenon of “reshoring” (15), and workforce needs will change accordingly.

In summary, there is a fair amount of uncertainty in the future due to inflation, fear of recession, supply chain problems, crude oil prices, and changes in global trade. However, the U.S. chemical industry is fundamentally strong; overall, the situations should be manageable in the next few years. As always, innovation is the key to future growth. There is no shortage of innovative scientists and promising research in chemistry; it is important to help them translate the discoveries to innovation. Because chemical industry is such a crucial part of the chemistry enterprise, continued interactions and collaborations among industry, academia, and government need to be maintained and encouraged. Increased involvement of industrial personnel in scientific and professional activities will also be beneficial.


  1. International Council of Chemical Associations, 2019.,Council%20of%20Chemical%20Associations%20(ICCA)
  2. J. Smialek, A. Swanson, New York Times, 5/3/22.
  3. The Economist, 6/11/22, pp. 63-64.
  4. American Chemical Council.
  5. G. Teare, Crunchbase News, 6/6/22.
  6. National Science Board, Vision 2030, Report #: NSB-2020-15, May 2020.
  7. National Research Council, Sustainability in the Chemical Industry, Washington, DC: The National Academies Press, 2006.
  8. L. A. Peleg, Chemical Plants are Stepping into a Sustainable Future,,management%20in%20their%20sustainability%20strategies.
  9. C&EN’s World Chemical Outlook 2022, January 12, 2022.
  10. Accenture, 2022.
  11. Bureau of Labor Statistics.
  12. Statista,
  13. McKinsey,
  14. The Economist, 6/18/22, p. 9.
  15. Reshoring and New Globalization: The Future of Supply Chains

H.N. Cheng, ACS Immediate Past President
H.N. Cheng, ACS Immediate Past President

H. N. Cheng recently retired from the Southern Regional Research Center of the U.S. Department of Agriculture. Previously he worked for many years at Hercules Incorporated, where he held various R&D and managerial positions. He has played major roles in the development of several commercial products and has published over 300 papers and 26 patent publications. He has organized 45 symposia at national meetings since 2000, and edited 23 books.

He received his BS (summa cum laude) from UCLA, and his PhD in physical chemistry from the University of Illinois, Urbana-Champaign. He did his postdoctoral work at Bell Telephone Laboratories in Murray Hill, NJ.  He has been a member of the American Chemical Society since 1982. As 2021 ACS President, he championed the cause of chemistry, emphasizing the importance of growth, R&D, sustainability, and digitization, and collaborated with others to support programs that enhance innovation, industrial engagement, entrepreneurship, and networking.

The opinions expressed in this article are the author's own and do not necessarily reflect the view of their employer or the American Chemical Society.

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