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Chemical Manufacturing

Industry Overview
Chemicals are an essential component of manufacturing and are vital to industries such as construction, motor vehicles, paper, electronics, transportation, and agriculture. Although some chemical manufacturers produce and sell consumer products such as soap, bleach, and cosmetics, most chemical products are used as intermediate products for other goods.

Industry Organization
Chemical manufacturing is divided into seven segments, six of which are covered here: Basic chemicals; synthetic materials, including resin, synthetic rubber, and artificial and synthetic fibers and filaments; agricultural chemicals, including pesticides, fertilizer, and other agricultural chemicals; paint, coating, and adhesives; cleaning preparations, including soap, cleaning compounds, and toilet preparations; and other chemical products. The seventh segment, pharmaceutical and medicine manufacturing, is covered in a separate industry profile. 

Basic Chemicals
The basic chemicals segment produces various petrochemicals, gases, dyes, and pigments. Petrochemicals contain carbon and hydrogen and are made primarily from petroleum and natural gas. The production of both organic and inorganic chemicals occurs in this segment. Organic chemicals are used to make a wide range of products, such as dyes, plastics, and pharmaceutical products; however, the majority of these chemicals are used in the production of other chemicals. Industrial inorganic chemicals usually are made from salts, metal compounds, other minerals, and the atmosphere. In addition to producing solid and liquid chemicals, firms involved in inorganic chemical manufacturing produce industrial gases such as oxygen, nitrogen, and helium. Many inorganic chemicals serve as processing ingredients in the manufacture of chemicals, but do not appear in the final products because they are used as catalysts -- chemicals that speed up or otherwise aid a reaction.

Synthetic Materials
The synthetic materials segment produces a wide variety of finished products as well as raw materials, including common plastic materials such as polyethylene, polypropylene, polyvinyl chloride (PVC), and polystyrene. Among products into which these plastics can be made are loudspeakers, toys, PVC pipes, and beverage bottles. This industry segment also produces plastic materials used for mixing and blending resins on a custom basis. Motor vehicle manufacturers are particularly large users of synthetic materials.

Agricultural Chemicals
The agricultural chemical segment, which employs the fewest workers in the chemical industry, supplies farmers and home gardeners with fertilizers, herbicides, pesticides, and other agricultural chemicals. The segment also includes companies involved in the formulation and preparation of agricultural and household pest control chemicals.

Paints, Coatings, and Adhesive Products
The paint, coating, and adhesive products segment includes firms making paints, varnishes, putties, paint removers, sealers, adhesives, glues, and caulking. The construction and furniture industries are large customers of this segment. Other customers range from individuals refurbishing their homes to businesses needing anticorrosive paints that can withstand high temperatures.

Cleaning Preparations
The cleaning preparations segment is the only segment in which much of the production is geared directly toward consumers. The segment includes firms making soaps, detergents, and cleaning preparations. Cosmetics and toiletries, including perfume, lotion, and toothpaste, also are produced in this segment. Households and businesses use these products in many ways, cleaning everything from babies to bridges.

Other Chemical Products
The "other chemical" products segment includes manufacturers of explosives, printing ink, film, toners, matches, and other miscellaneous chemicals. These products are used by consumers or in the manufacture of other products.

Chemicals generally are classified into two groups: commodity chemicals and specialty chemicals. On the one hand, commodity chemical manufacturers produce large quantities of basic and relatively inexpensive compounds in large plants, often built specifically to make one chemical. Most of these basic chemicals are utilized to make more highly refined chemicals used in the production of everyday consumer goods by other industries. On the other hand, specialty chemical manufacturers produce smaller quantities of more expensive chemicals that are used less frequently. Specialty chemical manufacturers often supply larger chemical companies on a contract basis. Many traditional commodity chemical manufacturers are divided into two separate entities, one focused on commodities and the other on specialty chemicals.

The chemical industry segments vary in the degree to which their workers are involved in production activities, administration and management, and research and development. Industries that make products such as cosmetics or paints that are ready for sale to the final consumer employ more administrative and marketing personnel. Industries that market their products mostly to industrial customers generally employ a greater proportion of precision production workers and a lower proportion of unskilled labor

Recent Developments
Nanotechnology will continue to benefit all of the manufacturing industries. The advantages of the applications of nanotechnology have far from reached their limits, but research and development in nanotechnology are both expensive and time consuming. In the chemical manufacturing industry, developments in nanotechnology will help conserve energy needed to produce chemicals and reduce the amount of waste products, making the manufacturing process more efficient. Some localities are imposing or considering restrictions on the use of plastic bags, a product of the chemical manufacturing industry. Whether the outcome is a ban on plastic bags or a tax on plastic bags, demand for such bags will be affected negatively. In addition, many grocery stores offer reusable bag discounts for customers who forgo the plastic bags.

Working Environment 
Manufacturing chemicals usually is a continuous process; this means that, once a process has begun, it cannot be stopped when it is time for workers to go home. Split, weekend, and night shifts are common, and workers on such schedules usually are compensated with higher rates of pay. The industry employs relatively few part-time workers. Most jobs in chemical manufacturing are in large establishments. In the basic chemical manufacturing segment, large establishments that employed 50 or more workers in 2008 provided 80 percent of the industry's jobs. The plants usually are clean, although machines that run constantly sometimes are loud and the interior of many plants can be hot. Hardhats and safety goggles are mandatory and worn throughout the plants.

The chemical and allied products industry employs about 560,000 wage and salary workers.  Chemical firms are concentrated in regions where other manufacturing businesses are located, such as the Great Lakes region near the automotive industry. Chemical plants also are located near the petroleum and natural gas production centers along the Gulf Coast in Texas and Louisiana. Because chemical production processes often use water, and chemicals are primarily exported by ship all over the world, major industrial ports are another common location of chemical plants. Texas, New Jersey, Louisiana, North Carolina, and Illinois are the nation's top chemical producers. Most segments of the industry had substantial numbers of jobs as shown below.

Distribution of wage and salary employment in chemical manufacturing, except pharmaceutical and medicine manufacturing, by detailed industry, 2008 (Employment in thousands)
Industry Employment Percent
Chemical manufacturing, except pharmaceutical and medicine manufacturing, total 560.0 100.0
Basic chemical manufacturing 152.1 27.2
Soap, cleaning compound, and toilet preparation manufacturing 108.2 19.3
Resin, synthetic rubber, and artificial synthetic fibers and filaments manufacturing 105.4 18.8
Paint, coating, and adhesive manufacturing 62.8 11.2
Pesticide, fertilizer, and other agricultural chemical manufacturing 36.1 6.4
Other chemical product and preparation manufacturing 95.4 17.0
SOURCE: BLS National Employment Matrix, 2008-18

STEM Degree Paths into this Industry
There are many career paths into every industry...within the Career Cornerstone Center we focus on describing the STEM and Medicine (STEM) career paths that may be prevalent in a given industry.

Most workers in professional and related occupations in this industry conduct research and develop chemical products.

Chemists and materials scientists carry out research over a wide range of activities, including analyzing materials, preparing new materials or modifying existing ones, studying chemical processes for new or existing products, and formulating cosmetics, household care products, or paints and coatings. They also try to develop new chemicals for specific applications and new applications for existing chemicals. The most senior chemists sometimes advance to management positions. Although chemical companies hire some chemists with bachelor's degrees, a master's or doctoral degree is becoming more important for chemist jobs.

Chemical engineers design equipment and develop processes for manufacturing chemicals on a large scale. They conduct experiments to learn how processes behave and to discover new chemical products and processes. A bachelor's degree is essential for all of these jobs, and a master's degree may be preferred or required for some.

Engineering and science technicians assist chemists and engineers in research activities and may conduct some research independently. Those with bachelor's degrees in chemistry or graduates of 2-year technical institutes usually fill these positions. Some graduates of engineering programs start as technicians until an opportunity to advance into an engineering position arises.

Engineering managers conduct cost estimations, perform plant design feasibility studies, and coordinate daily operations. These jobs require a college degree in a technical discipline, such as chemistry or chemical engineering, as well as experience in the industry. Some employees advance from research and development positions to management positions.

Employment of wage and salary workers in chemical manufacturing, except drugs, 2008 and projected change, 2008-2018.
(Employment in thousands)
Occupation Employment, 2008 Percent Change,


Number Percent


All occupations 560.0 100.0 -13.3




Management, business, and financial occupations 53.2 9.5 -15.0


Management occupations 35.1 6.3 -17.9


Business and financial operations occupations 18.1 3.2 -9.3




Professional and related occupations 68.8 12.3 -15.6


Computer specialists 6.2 1.1 -15.2


Chemical engineers 7.8 1.4 -21.0


Industrial engineers 5.5 1.0 -3.0


Chemists 12.7 2.3 -16.1


Chemical technicians 16.3 2.9 -18.4


Note: Columns do not add to total due to omission of occupations not directly derived from degrees in STEM.
Original Source: BLS National Employment Matrix, 2008-18.


Industry Forecast
Employment is projected to decline, and applicants for jobs are expected to face keen competition.

Although output is expected to grow, wage and salary employment in the chemical manufacturing industry, excluding pharmaceuticals, is projected to decline by 13 percent over the 2008-18 period, compared to 11 percent growth projected for all industries combined. The expected decline in employment can be attributed to trends affecting the U.S. and global economies. A number of factors will influence chemical industry employment, including technological advances that have enabled plant automation and more efficient chemical processes that have affected the production process, the state of the national and world economy, company mergers and consolidation, increased foreign competition, the shifting of production activities to foreign countries, and environmental health and safety concerns and legislation. Another trend in the chemical industry is the rising demand for specialty chemicals. Chemical companies are finding that, in order to remain competitive, they must differentiate their products and produce specialty chemicals, such as advanced polymers and plastics designed for customer-specific uses -- for example, a durable body panel on an automobile.

Improvements in production technology have reduced the need for workers in production; installation, maintenance, and repair; which account for large proportions of jobs in the chemical industry. Sophisticated machines with computerized controls have replaced some workers in standard production. With automation manufacturers can increase accuracy and decrease time and labor costs, thus contributing to increased production efficiency. Although production facilities will be easier to run with the increased use of computerized controls, the new production methods will require workers with a better understanding of the systems.

It is important for firms to improve their bottom line. Pressure to reduce costs and streamline production will result in mergers and consolidations of companies both within the United States and abroad. Mergers and consolidations are allowing chemical companies to increase profits by eliminating duplicate tasks and departments and shifting operations to locations in which costs are lowest. U.S. companies are expected to move some production activities to developing countries—in East Asia and Latin America, for example—to take advantage of rapidly expanding markets.

The volatility of inputs like crude oil and natural gas prices impact the chemical manufacturing industry. Likewise, prices of chemical feedstocks—like ethane or propane, which are used to produce petrochemicals, plastics, fertilizers, and other products— can be unstable. In response, prices for chemical products must fluctuate and so does demand for chemical products. If prices of such inputs are continually high, demand will be low for chemical products and manufacturer will need to employ fewer workers; the opposite would occur if inputs are continually low priced.

Increasing interest in going "green" throughout the U.S. may affect the chemical manufacturing industry. For example, there are efforts to reduce the amount of emissions the U.S. produces. As manufacturers have limits imposed on their emissions, the cost of producing chemical products will rise, likely reducing demand. Also, many localities are considering restrictions on the use of plastic shopping bags, a product of the chemical manufacturing industry.

The factors influencing employment in the chemical manufacturing industry will affect different segments of the industry to varying degrees. Only one segment—paint, coating, and adhesive products segment—is projected to grow. The remaining segments are projected to lose jobs.

Individuals seeking employment in the chemical manufacturing industry are expected to face keen competition, particularly those seeking to enter the industry for the first time. For production jobs, opportunities will be best for those with experience and continuing education. For professional and managerial jobs, applicants with experience and an advanced degree should have the best prospects. In addition, some job opportunities will arise from the need to replace workers who transfer to other occupations or who retire or leave the labor force for other reasons.

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Note: Some resources in this section are provided by the US Department of Labor, Bureau of Labor Statistics.



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