Global chemicals market to show slight gains in '07

27 June 2007 15:36  [Source: ICIS news]

WASHINGTON (ICIS news)--The global chemicals business is likely to grow slightly this year, with large gains in Asia, Africa, the Middle East and Europe offsetting stalled growth in the US, top industry economists said on Wednesday.

 

Worldwide chemicals output would increase by 4.7% in 2007 compared with a growth rate of 4.5% in 2006, said Kevin Swift, head of the economic analysis team at the American Chemistry Council (ACC).

 

“The most rapid growth will occur in Asia-Pacific (excluding Japan), Africa and the Middle East, Central and Eastern Europe and Latin America,” he said. “Among the developed nations, Germany and Ireland will experience the strongest growth.”

 

The US chemicals business has seen less growth in recent quarters, he added.

 

“With the slowdown in manufacturing, growth in the US business of chemistry has stalled since the third quarter [of 2006],” Swift said. “A build-up of downstream customer inventories and subsequent drawdown has occurred with adverse effects on chemical industry production.”

 

However, he said, downstream inventory de-stocking appeared to be running its course and leading indicators of manufacturing activity pointed to a stronger second half this year for US chemicals, though it wasn’t guaranteed.

 

“The US economy has lost momentum and economic growth is below trend, hampered by the effects of the housing slump,” he said. 

 

“The risks of a sharper and more pronounced downturn are relatively high,” he added.  Chief among those risks is “the US housing market leading to a more serious retrenchment in the broader economy”, he said.

 

In the long term, “growth for the world chemical industry during the next 10 years will average 3.5%, with the emerging markets exhibiting the strongest prospects”, Swift said.

 

By: Joe Kamalick
+1 713 525 2653

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