One statistic that really puts the impact of the COVID-19 pandemic into perspective is this: the silicone market will take a bigger hit this year than it did heading into the Great Recession.
During 2008, the global silicone sector, which has been on a general upward growth pattern for much of the past two decades, saw sales drop by 5.5 percent. This year, however, the silicone market is expected to be off more than 8 percent, according to Kent Furst, who follows the sector for Freedonia Group. That percentage drop is more than the 6-7 percent drop expected for the U.S. GDP.
On the good side, though, silicone is expected to rebound quicker than the GDP, with Furst expecting the ground lost this year to be made up next year, and for silicones by 2022-23 to approach its highest points, reached during 2017-18.
Of course, the numbers are only one part of the story. Furst is quick to point out, "Statistics are no substitute for judgment. Numbers are important, but the story behind the numbers is more important."
And for much of 2020, that story has been difficult to pinpoint, as the conventional wisdom surrounding the pandemic has changed quickly. First China was going to be hit hardest, but now they appear to have the best of it. In April and May, the construction sector was expected to be hardest hit; now it's seen as one of the lightest hit. Just past mid-year, it was thought that things would be better to start 2021.
Now, nobody expects a return to normal until a vaccine is perfected.
At one point, Europe was harder hit than the U.S. Then that changed, but when the U.S. was seen by late summer as handling the situation worse than other developed nations, Europe went into lockdown due to a second big wave.
One of the biggest declines will come from transportation, but long-term prospects show potential there, particularly for liquid silicone rubber, seen as a premium material that will outperform the general silicones market.
Silicone use in personal care maintains a dark forecast for the time being, since people in large part are not socializing as much and, when working at home, don't have the need for products used when going to an office.
Medical and health care continues to be a bright spot, as the pandemic has spiked the need for such goods as PPE and ventilators. Use in wire and cable also is expected to widen because of silicone properties that make it desirable for that industry.
The best news for silicone is its resiliency, Furst said. Just as it bounced back from the hit it took during the Great Recession, it should prosper long term following the downturn wrought by the current pandemic.