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Chemical Wholesale

Chemical Wholesale

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Executive summary

Operators in the Chemical Wholesaling industry buy chemicals from manufacturers and redistribute them as raw materials to a diverse base of downstream users. The construction and manufacturing sectors are key customers for chemical wholesalers and, as a result, their production levels largely determine demand for industry products. Socio-and macroeconomic disruptions stemming from the COVID-19 (coronavirus) negatively affected demand from many of the industry's downstream markets; however, the vast scope and diversity of the industry has shielded it from more significant declines. Improving economic conditions postpandemic has renewed demand across the industry's downstream markets, enabling an industry recovery as heightened consumer spending spurred manufacturing and industrial production activity. Overall, industry revenue is anticipated to rise at an annualized rate of 2.7% to $255.2 billion over the five years to 2022, including an expected increase of 6.8% by year-end 2022.
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Each report includes:

industry revenue;

industry profit;

industry margin;

industry employment;

industry major players;

industry key external drivers;

industry product & structure segmentation;

industry key trends;

industry Life Cycle;

industry Geographic Breakdown;

industry Key Success Factors;

industry Key statistics for previous years;

forecast of industry Key statistics for the next 5 years;

Reference Wordlist

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

Colloquial Terminology

ENVIRONMENTAL PROTECTION AGENCY (EPA)
A government agency designed to protect human health and safeguard the natural environment.

SURFACTANT
Compounds that lower the surface tension between two liquids or between a liquid and a solid. A surfactant may act as detergents, wetting agents and foaming agents.

WHOLESALE
The sale and resale of goods without transformation to retailers, commercial customers and other wholesalers.

Details

Over the past five years, the industry has undergone increased consolidation activity as major companies seek to acquire smaller, regional players to exacerbate economies of scale, enter new geographic markers and realize cost efficiencies. Since wholesalers offer similar products to consumers, price and proximity to downstream markets have become the most competitive factors for operators. While consolidation activity can typically lead to a higher average profit margin, industry profitability has likely been constrained by the price volatility of crude oil, the main component in chemical manufacturing, over the five years to 2022.

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