Capital Investment

The business of chemistry has consistently been one of the largest U.S. private-sector investors in new plants and equipment (P&E), as new products and processes resulting from R&D are brought into reality. Profit margins (and operating profits) and capacity utilization rates are drivers for P&E investment. 

During much of the post-World War II period, real (that is, adjusted for the effects of inflation) capital investment in structures (or plants) and equipment by the business of chemistry paralleled overall U.S. economic activity. Investment rose during periods of business expansion and fell during periods of economic downturns. Overall, however, annual capital investment in the business of chemistry has experienced sustained long-term growth.

Investment in Knowledge

Organized industrial research in the business of chemistry did not begin until about 1900. World War I gave new emphasis to research, and marked the beginning of sizable programs. Since then, R&D efforts by the business of chemistry have continued to expand, and despite lower profit margins, chemical companies are maintaining their R&D activity, making business of chemistry one of the largest in private sector funding of R&D.

[Economic data generated from the Guide to the Business of Chemistry 2011.]