Global chemicals market to grow to 5.1 trillion by 2020
The world’s chemical industry is expected to grow from $4.1 trillion in 2013 to $5.1 trillion by 2020 according to a report from Solidiance. The major driver for growth remains China, whose 25% chemical industry CAGR ended in 2013, but whose 8% annual growth rate to 2020 will continue to boost the industry. Particularly innovation in the automotive industry, energy transformation, construction and electronics will continue to increase chemical industry growth.
The Chinese economy has in recent years enjoyed stellar rates of growth. In demand sectors of the economy’s wider industry have, in line with the country’s growth, also enjoyed high rates of growth. In a recently released report from Solidiance, titled ‘New Chemical Era in China’, the consulting firm explores how the slowdown in the Chinese economy may come to affect the chemical market in the country and globally. The report provides some key insights into how the global market is faring, as well as a projection for the global market to 2020.
Between 2003 and 2013, the Chinese market value has increased from $128 billion to $1,361 billion. Europe in that time grew from $505 billion to $819 billion, while the North American (NAFTA) market has grown from $370 billion to $686 billion. In total, the world market expanded from $1.46 trillion in 2003 to $4.1 trillion in 2013.
Global chemical CAGR
According to the report, the global economy’s continued weakness, as well as the slowdown in the Chinese economy, will see growth in the chemical industry slow between 2013 and 2020, increasing by only around a trillion dollars in the years to 2020. Although growth in the Chinese market enjoyed a CAGR of 25% between 2003 and 2013, growth to 2020 is expected to drop off by two thirds to 8%. As a result, the Chinese market is expected to be worth an estimated $2 trillion by 2020. The European market’s growth will fall slightly from the around 3% enjoyed between 2003 and 2013 to 2% to 2020, increasing only $13 billion in that time. The North American market sees its growth rate relatively unchanged at 4%, growing to around $800 billion by 2020.
According to Solidiance a number of key drivers will continue to spur development in the Chinese chemicals industry, of which Consultancy.uk provides a summary:
Automotive: As China is set to become the world’s largest automotive market, innovation in products for the industry will continue apace. Chemical product developments will particularly revolve around advanced materials, with a focus on lightweight, safety, comfort, and environmental friendliness.
Energy: A global shift from carbon rich to sustainable energy sources – planned in the face of climate change – boosts the need for innovation in photo-electrics as well as other ways of producing sustainable energy. This will push for chemical processes and advanced material features to be used in solar panels, wind energy, water treatment, and gas purification.
Construction: The construction sector has enjoyed unprecedented growth in China over recent years, with continued demand from the residential and commercial sector, new materials and chemical products will continue to be in demand to provide safety and energy saving features to projects.
Electrical & Electronic: The continued demand of advanced electronics and ever more miniaturisation – coupled with environmental concerns about the dangerous chemicals used in the process – is pushing the chemical industry to come up with innovative solutions to producing electronics and improve performance.
