CAPITAL SPENDING TO STAGNATE IN '99

Abstract

Major chemical producers are anticipating a more difficult year in 1999 than they had this year. As they map out capital purchases for 1999, most either plan no increase or plan to cut back from 1998 spending levels. A few plan double- and triple-digit increases for investment in new plants and equipment, but they have done so to meet unusual needs. Overall, though, the group of 22 medium- and large-sized chemical companies C&EN just polled plans to decrease their combined worldwide capital spending by 2%, to $9.5 billion, in 1999. Of the 22 companies surveyed, nine plan to reduce capital spending below 1998 levels. Another seven plan either no increase at all or only a very modest increase. However, six others plan substantial boosts to their budgets, ranging from 10 to 100%. Overcapacity and dropping prices, and along with them declining profit margins, are behind some of the impetus to limit capital spending in 1999. ...