Chemical manufacturing in the United States expanded between 2017 and 2022 even as the broader manufacturing sector saw a decline in establishments, according to new data released by the U.S. Census Bureau.
The agency said the chemical manufacturing subsector – responsible for producing products ranging from medicines and fertilizers to plastics, soap and ink – recorded notable gains in both the number of establishments and the value of shipments during the period covered by the latest Economic Census.
“Most people may not realize the close connection they have with the Chemical Manufacturing industry, but it’s a subsector that helps create commonplace products we all use, from ink and soap to plastics and medicine,” wrote Census Bureau supervisory survey statistician Lynda Lee and writer/editor Travis Shoemaker in the agency’s analysis.
Data from the 2022 Economic Census showed the number of U.S. chemical manufacturing establishments, classified under NAICS 325, rose 10.2% from 13,571 in 2017 to 14,961 in 2022. Over the same period, the total number of manufacturing establishments across all industries declined 1.7%, from 291,586 to 286,626.
The subsector also recorded growth in economic output. The value of shipments for chemical manufacturing increased 22.4%, climbing from about $735.9 billion in 2017 to $901.0 billion in 2022, though the figures were not adjusted for price changes.
According to the Census Bureau, increased industrial production in the pharmaceutical sector played a significant role in that growth. Production workers’ annual hours in the Pharmaceutical and Medicine Manufacturing industry increased from 270.1 million hours in 2017 to 341.6 million hours in 2022.
The North American Industry Classification System defines chemical manufacturing as the transformation of raw materials through chemical processes into new products. The range of activities includes processes such as refining oil into margarine and synthesizing plant compounds like willow bark into medicines such as aspirin.
Historical data from the Census Bureau’s Business Dynamics Statistics show the broader manufacturing sector experienced strong rates of new establishment creation until the early 1990s, when closures began to outnumber startups.
Within chemical manufacturing, the rate of newly created establishments reached its highest level in 2022, while the rate of closures has also risen in recent years, with 2022 and 2023 marking the highest exit rates in two decades.
Employment trends tied to the industry were mixed. Between 2017 and 2022, the number of pharmacists increased about 28.1%, chemical engineers rose 54.5%, and chemists and materials scientists grew 24.8%.
At the same time, the number of chemical technicians declined 2.2%. Employment in pharmacies and drug stores also fell by about 5.6% over the period, alongside a decline in the number of establishments in that industry.
Geographically, the chemical manufacturing workforce is concentrated in certain regions. Data from the Census Bureau’s 2023 Annual Integrated Economic Survey showed the largest shares of workers were located in the South, with about 334,398 employees, and the Midwest, with 242,706.
The agency also highlighted variations in market concentration across different chemical manufacturing industries. In petrochemical manufacturing, the four largest firms accounted for about 74.2% of the sector’s $77.6 billion in shipments in 2022, indicating a high level of concentration.
By comparison, medicinal and botanical manufacturing was less concentrated, with the top four firms accounting for about 24.7% of the industry’s $13.9 billion in shipments.
The Census Bureau said the findings illustrate both the scale and complexity of chemical manufacturing, which plays a central role in producing a wide range of consumer and industrial products across the U.S. economy.
