The U.S. chemical processing industry (CPI) experienced a promising start in 2013, with about $9 billion in projects funded and approved in the first quarter, according to Industrial Info Resources (IIR).
An improving economy and an abundance of cheap shale gas are seen as the driving factors for growth in the CPI. The shale gas boom in the U.S. has paved the way for significantly lower feedstock costs in certain sectors, which has fueled optimism and encouraged project planning, IIR reports.
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While some of the projects planned to kick off this year could be canceled or pushed into the future for various reasons, IIR says it is seeing an increase in the percentage of the value of projects that actually start during a calendar year in regard to the value proposed to start at the beginning of the year -- what is known as the "confidence factor." This percentage has increased rapidly since hitting a low in 2009, when U.S. gross domestic production reached its lowest point in several years.
Despite this increasing domestic strength, the CPI still faces headwinds as debt burden in the U.S. and abroad, and sluggish growth in developing countries hinder global demand, according to IIR. The future of CPI projects depends on the continued low price of natural gas and the speed at which developing economies grow.