What Is Chemical Industry Analysis?

Chemical industry analysis involves the reporting on conditions in the chemical industry that might be relevant to investors, regulators, and members of the profession. The specifics of an analysis can depend on how it will be used and who prepares it. Some may be available to members of the public while others can be restricted because they deal with confidential or proprietary information. People conducting research can check trade publications and government agencies charged with regulating the chemical industry for current reports, as both tend to be good resources for information.

This type of industry analysis looks at the current profile of the industry to provide information about what kinds of chemicals are being manufactured and how they are used. A chemical industry analysis may discuss regions that produce large numbers of chemicals, as well as the state of demand for different kinds of products. Uses can also be discussed, ranging from industrial processes that require certain compounds to consumer products like cleaning solutions made by the chemical industry. The goal is to generate a complete demographic overview of what is being manufactured, who is manufacturing it, how it is being used, and where it is being made and sold.

History may also be a subject of interest in a chemical industry analysis. Analysts typically want to be able to discuss growth knowledgeably to provide information about changing sectors, and may want to examine specific historical issues. For example, if pollution in a particular sector was an ongoing problem and it has dropped radically, the report might discuss this. The information could contextualize the findings in the report, like a small drop in profits caused by having to invest in better pollution control systems.

Projections are also part of a chemical industry analysis. The document can discuss areas of anticipated growth in the industry along with the reasons for the estimates of increased growth. A new manufacturing process might call for a specific chemical, for instance, in which case firms could reasonably expect to sell more of it over coming years. Specific threats to the industry like pending legislation, changes in standards and practices, and decreased availability of raw materials may also be covered.

Companies can include a chemical industry analysis in their annual reports and other disclosures for investors if they feel this information would be important. Data can also be useful for regulators who want to know where to direct their attentions and whether their efforts are having an impact on pollution, contamination, and other issues. Within the industry, companies want to know where their competition lies and how to adapt to changes in the industry over time.