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Industry Watch.

Chemicals: More than 100 countries signed a convention banning 12 Persistent Organic Pollutants (POPs) in Stockholm. The historic move will be known as the Stockholm Convention and the chemicals include pesticides, industrial chemicals, as well as hazardous byproducts of combustion. The ban is aimed at POPs because they are some of the world's most hazardous pollutants, causing birth defects, disease and death. The chemicals can take decades to break down and can travel thousands of miles from their origination point. The US eagerly signed this global deal because the chemicals that fall under the ban have already been outlawed in the US.

Source: Financial Times

Semiconductors: The World Semiconductor Trade Statistics group said that the global market for semiconductors will likely shrink by 14% in 2001 to $176.79 billion because of lagging demand for personal computers and cellphones. Although the group predicted a 20% growth in the market last October, it appears the slowdown in demand for information-technology products will prohibit such growth. The sector's slowdown comes after last year's record setting revenue of $204.39 billion on a 37% jump in sales. The group estimates the latter half of 2001 will be stronger than the first half, with better than 5% growth for the third quarter and more than 7% growth in the fourth quarter.

Source: Wall Street Journal

Environmental: According to the tenth Environmental Business Planning Study conducted by Miller & McConnaghy, LLC, laboratory acquisitions and consolidations continue, resulting in higher profits on relatively flat revenues. Recruiting employees and retaining them is a major concern for lab managers, and correspondingly, more profits are being set aside for rewarding employee performance. Due to pressure, prices have increased for most analytical categories but they have not reached 1998 levels. Profits are up and both earnings and cash flow have increased for the fourth consecutive year. Lab payrolls have decreased from 44.2% to 39.6% of sales. are not investing as much in new equipment, and are not replacing equipment as often. Labs have increased revenues from government clients over the past four years, while private sector clients have decreased their share of purchases over the same period. The study determined that the industry is at the end of a business cycle characterized by consolidation, heavy price competition, little profit, and overcapacity. The new business cycle will show increased productivity and diversification in non-environmental markets.

Source: Environmental Testing & Analysis

R&D: The US chemical industry, a $419 billion annual business, has experienced a steady decline in its percentage share of US research and development. In 1956, the chemical industry made up 11% of all R&D in the U.S. In the past decade, that number has fallen to about 8%. The Council for Chemical Research (CCR) recently published a report to provide chemical companies with an idea as to what kind of profit returns come from their research and development efforts. The report found that on average, for every dollar invested in chemical R&D, $2 in operating income is realized over six years.

Source: Business Week
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Publication:Instrument Business Outlook
Article Type:Brief Article
Date:Jun 15, 2001
Words:508
Previous Article:Spring 2001 Business Climate Survey: Guarded Optimism.
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