US housing crisis gives Dow the jitters on economy

25 September 2007 15:18  [Source: ICIS news]

TORONTO (ICIS news)--Dow Chemical remains worried about the US housing crisis and high energy prices spilling over into consumer spending and threatening the economy, CEO Andrew Liveris said on Tuesday.

 

“I don’t think any of us [in the chemical industry] are talking recession but I do think we are all worried that this thing will … more than trickle over into consumers' spending,” Liveris told a Credit Suisse chemical conference in New York.

 

The US residential housing market was still underperforming and Dow did not expect it to bounce back before the end of next year, he said.

 

The Federal Reserve Bank’s 50 basis-point rate cut last week was a “very dangerous move” given the country had experienced inflation for some time, he added. 

 

While the official measurements do not show it, the US was experiencing inflation from rising energy and housing prices, Liveris said.

 

Asked to comment on the prospects for the domestic ethylene industry, he said any new investments in the US were not viable, not only due to high feedstock and capital costs but also a scarcity of chemical engineers.

 

“I don’t think there is anyone who will be announcing new crackers here for a long, long time,” he said and also pointed to INEOS’ decision last week to suspend a cracker project in Germany to back up his point.

By: Stefan Baumgarten
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