Can the US chemical industry beat declining productivity?

Just released on May 30, US chemical labor productivity experienced a 2.3% decline in 2023, continuing a trend of mostly diminishing productivity since 2007.

Kicking the can down the road doesn't pay off

During the early stages of the low-cost gas petrochemical investment boom, producers had little interest in building assets for superior productivity when there was so much money to be made based on just the feedstock cost differences with the rest of the world (except for, mainly, the Middle East). This differential is still true for some large products.

Many producers will face growing challenges prioritizing productivity over near-term profits. However, markets are getting over-supplied, new production routes are being developed, US NGL gas feedstocks are being shared across the globe, logistics costs are rising and geopolitical and weather disruptions are continuing. Profits are being chipped away.

How can producers improve future productivity?

Design stage strategies are crucial. Producers should prioritize productivity improvements and ensure operational needs are integrated into the design of new assets. An integrated project delivery approach simplifies interfaces, drives construction-led design, and ensures shorter schedules, lower costs, and higher quality outcomes. Incorporating asset automation with advanced technologies like IIoT, AI, and ML is crucial for optimizing performance and enhancing safety.

Worley stands out as a leader in this space, having delivered $3 billion in benefits to customers over the last decade and managing over 200 O&M and asset services contracts globally. Producers can leverage Worley's expertise to streamline operations, increase efficiency, and enhance safety across their assets' lifecycle.

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