A downturn, not a dip
on October 26, 2008

The blog first raised this issue last December, when noting that global chemical industry production growth had already “slowed significantly”.
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At that time, it questioned whether “central bankers will be able to wave the magic wand that restores us to a growth path”. And it warned “it is hard to imagine that the chemical industry can avoid a serious downturn”. The above chart, based on Kevin Swift’s must-read weekly report for the ACC, shows how serious the situation has now become.
• Asia Pacific growth has fallen from 10% in June 2007 to 3% in August
• Central/Eastern Europe has crashed from 10% to -3%
• Latin America growth has fallen from 3% to zero
• Western Europe has fallen from 3% to -1%
• N America has gone from zero to -3% in September
The Middle East is the only robust region, where new capacity based on advantaged feedstocks has caused growth to increase from 5% to 13%.
World chemicals growth is usually close to GDP. So it is ominous that growth had fallen from 5% to 1%, even betore the current Crash. This must further impact demand and credit availability. The blog therefore believes that the industry needs to prepare for a serious and extended downturn.

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