Many of us are concerned about the economy. What is up with inflation? What will the Fed do to interest rates to control inflation? Will we have a soft landing or a hard landing as we come out of the unprecedented economic challenges of the last three years? Are we headed for a recession? If so, how long will it last, and how bad will it be?

Among all the worries and concern, here is a bit of good news: a report released by the American Chemistry Council (ACC) in December 2022 found that the chemical industry had one of its best years in a decade, and the United States expanded its dominant position as a leading producer of chemical products. And while the report predicts a slowdown in chemical production for 2023, it expects demand to pick up in the following years. The study also reports that the U.S. chemical industry will continue to have a competitive advantage due, in part, to U.S. domestic energy production.

What are some of the drivers of growth in the chemical sector? Two stand out: the U.S. housing market and the continued move towards lighter vehicles.

As demand for more sustainable means of transportation continues to rise, manufacturers are looking for ways to lightweight vehicles. Additionally, electric vehicles are more chemistry intensive, and their share of the automotive market is expected to increase. According to the ACC report, each vehicle uses approximately $4,000 in chemistry, and some of those critical lightweighting and electrification materials are adhesives and sealants.

While the housing market is currently experiencing some short-term problems due, in part, to affordability issues, the longer-term projections for that market are good. Going hand-in-hand with expanded housing is the demand for more sustainable, energy efficient design. Again, adhesives and sealants play an important role in that design, both in new-builds and renovations.

Under the Inflation Reduction Act, signed into law in 2022, homeowners may be eligible for tax credits when they make energy efficiency improvements to their homes, including energy-efficient doors and windows, insulation, and solar power and heat pumps. Tax credits for the purchase of new and used electric vehicles are also included in the act. All of the technologies that qualify for these credits need chemicals, including adhesives and sealants, for their production.

What are the factors that will help the chemical industry move into the future? The ACC listed key promoters of growth. They are: U.S. energy development (including infrastructure investment and permitting reforms), fixing regulatory bottlenecks within the EPA, and updating transportation policies in support of more reliable and competitive freight rail service and truck capacity.

When I started this job, I had no idea I would spend so much time reading and thinking about trains. First, there were supply chain issues (particularly with multi-modal containers), then a potential rail strike that would have crippled the chemical sector, and most recently a significant derailment -- and the associated attempts at containment-- of a train carrying chemicals in Ohio. In February, the National Association of Chemical Distributors (NACD) announced it had joined with Senator Bernie Sanders (I-VT) and Senator Mike Braun (R-IN) to “call on freight rail companies to address basic quality-of-life benefits for rail workers.” The issue: paid sick leave. “A lot of our members utilize rail yards and terminals around the country. For us, it’s really important to have qualified, skilled rail employees at these locations so we can get these products, put them on trucks, and get them off to the end-users safely. Without them, we are not going to be able to have a successful and vibrant supply chain, which we’ve been struggling with over the last few years,” said NACD President and CEO Eric R. Byer. This partnership is understandable when considering the underlying issues and the critical needs at stake, and as such, it is an important topic for the chemical industry and more specifically raw materials of adhesives and sealants.

This issue of ASI covers raw materials. It includes the Raw Materials, Chemicals, Polymers, and Additives Handbook, which is a great resource for formulators of adhesives and sealants. For the latest on what industry professionals have to say about the state of the industry, read our annual raw materials roundtable article. Additionally, learn about mixing technology used in automated adhesives development and how infrared systems helped a manufacturer of laminated panels achieve consistent quality. Finally, find out who will be giving the keynote addresses at the Adhesive and Sealant Council’s Convention and Expo, which is taking place April 17-19 in New Orleans. It is right around the corner!