Executive Briefings

Many Chemical Giants to Boost R&D Investment This Year, Hold Back on Capital Spending

Some of the chemical industry's biggest companies plan to increase research investment this year, but they are holding back on capital spending.

The strong U.S. dollar, a weak economy in Europe, and slower growth in China are complicating forward-looking spending plans for many chemical companies this year. Individually, plans vary widely, but as a group, firms are taking a cautious approach to future-oriented spending. In some cases they are looking to university research alliances to get more bang for the buck.

Eight U.S. and European companies says they will, as a group, lift research spending 1.3 percent in 2015 to a combined $3.6bn. Twenty-two U.S. and European firms say they will decrease spending on new plants and equipment by 4.4 percent to $22.9bn.

The capital spending outlook is colored by BASF, which because of its size has a strong influence on industry statistics. It plans to decrease its 2015 budget by nearly $1.5bn because it is pulling back on its oil and gas investments. Without BASF, the group plans a 2.4 percent increase in capital spending this year.

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The strong U.S. dollar, a weak economy in Europe, and slower growth in China are complicating forward-looking spending plans for many chemical companies this year. Individually, plans vary widely, but as a group, firms are taking a cautious approach to future-oriented spending. In some cases they are looking to university research alliances to get more bang for the buck.

Eight U.S. and European companies says they will, as a group, lift research spending 1.3 percent in 2015 to a combined $3.6bn. Twenty-two U.S. and European firms say they will decrease spending on new plants and equipment by 4.4 percent to $22.9bn.

The capital spending outlook is colored by BASF, which because of its size has a strong influence on industry statistics. It plans to decrease its 2015 budget by nearly $1.5bn because it is pulling back on its oil and gas investments. Without BASF, the group plans a 2.4 percent increase in capital spending this year.

Read Full Article