CHEMICAL PRODUCTION increases showed some signs of slowing in 2007 in Europe and the U.S. compared with 2006, a strong growth year for the global chemical industry. Asia had most of the year’s double-digit growth sectors.

According to the European Chemical Industry Council (CEFIC), 2007 was a “hang-over” year. Although many production figures looked good, that appearance was illusory. Much of the growth, economists at CEFIC say, was actually an overhang from 2006 and reflected strong production growth in the last months of that year. By the end of 2007, CEFIC’s data indicate, production had tapered off sharply.

Most European sectors benefited from the strong economy in 2006, and momentum carried into 2007, particularly in basic inorganic chemicals. A few sectors, however—especially synthetic rubber and synthetic fibers—showed an overall decline, according to CEFIC data.

In the U.S., the output of chemical makers rose by 1.4% in 2007. This number lagged behind the percentage increase for manufacturing overall, which rose 1.9%, but it outpaced the index for nondurable manufacturing, which was up only 0.9%.

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Within the category of chemical products, which rose only 1.5%, the index for pharmaceuticals and medicines continued a long-term upward trend and rose 3.3%. The category of organic chemicals displayed the strongest growth, increasing 3.4%. This is well ahead of the sector’s 10-year average annual growth of just 1.4%.

Production in the basic inorganic chemicals category grew at 2.8%. This too is well ahead of the category’s 10-year growth pattern of just 0.6% annually. Within the category, the index for alkalis and chlorine rose 4.7% and the index for other basic inorganic chemicals jumped 6.6%. Only synthetic dyes and pigments declined, by 9.9%.

A few other production indexes registered declines. Soap, cleaning compounds, and toiletries posted a 3.9% drop, as did paint and coatings. As in Europe, synthetic fibers continued on a long-term downward trend, with the index slipping 5.0%.

And despite heavy demand from the farm sector, the U.S. production index for pesticides, fertilizers, and other agricultural chemicals fell 7.4% in 2007. That could be explained in part by the high cost of natural gas, which has limited the output of nitrogen-based fertilizers in recent years. Also affecting the index is lower output from U.S. phosphate mines, which has curbed phosphate fertilizer production in recent years.

Canada’s chemical industry and its overall manufacturing sector both saw declines in 2007, with chemical output dropping by 3.8%. Basic chemicals declined by 11.7%, and pharmaceuticals retreated by 4.9%. In organics, some categories like benzene and propylene were sharply up, while butadiene, formaldehyde, and toluene saw steady declines.

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Among notable changes in inorganic chemicals in Canada are the sharp declines in chlorine and sodium hydroxide—also known as caustic soda—production. Dow Chemical closed its large chlor-alkali complex in Fort Saskatchewan, Alberta, at the end of 2006.

Although Canada’s production of its largest resin product, polyethylene, increased a healthy 4.0%, other resins, such as unsaturated polyester and polystyrene, saw sharp production decreases. Dow also closed a polystyrene plant in Sarnia, Ontario, at the end of 2006.

In Asia, Japan’s production indexes all edged up in 2007 compared with 2006, but the overall picture was one of stagnation for Japan’s chemical industry. Taken as a whole, chemical production in Japan has barely increased for the past 10 years. Production of inorganic chemicals and dyes, sodium-based chemicals, cyclic intermediates and dyes, plastics, and fertilizers was lower last year than in 1997.

In South Korea, the industry experienced more dynamic growth, with production of many chemicals up sharply. South Korean output of the basic building block ethylene went up 12.1% last year. Production of butadiene, another important basic chemical, went up by nearly 14%.

Taiwan saw significant growth in a number of organic chemicals—including styrene, propylene, and benzene—as new facilities came on-line.

China, as usual, released few numbers, but the available data showed that the chemical industry there continued to grow phenomenally. Output of ethylene went up almost 20% in 2007 compared with 2006, and methanol production increased by a spectacular 41.2% to more than 10 million metric tons. Production of sulfuric acid surged by 10.9% to 54 million metric tons.