US economy ‘ominous’, may worsen – Dow’s Liveris

30 May 2008 19:51  [Source: ICIS news]

TORONTO (ICIS news)--The US economy has not yet bottomed out and may worsen, Dow Chemical CEO Andrew Liveris said on Friday, describing the situation as ominous.


“A month ago we might have said … the US slowdown could be bottoming, but I don’t think it is bottoming,” Liveris said in response to analysts’ questions at an investor conference in New York.


“I think we are in for a tough 2008 and maybe even a tougher 2009.”


He described US economic conditions as ominous, and pointed to demand destruction on the consumer side because of mortgage and credit worries as well as rising costs of fuel and other products.


Asked about Dow’s decision earlier this week to increase all its product prices by up to 20% effective 1 June to cope with rising oil and energy costs, Liveris said many customers actually welcomed the move as it helped their sales people, in turn, to push for higher product prices themselves.


“Many of them are saying, ‘Thank you for the air cover.'”


He spoke of a broad process of re-setting the chemical value chain to a high oil and energy price environment.


In a televised media interview earlier on Friday, Liveris said he was not expecting quick US government and congressional action to improve the domestic oil and gas supply situation.


Some 85% of US oil and gas reserves were off-limits to oil producers, yet the US was importing oil from everywhere else, he said, adding: “I think that is ludicrous.”


Asked about his comment on the energy strategies of the 2008 US presidential candidates,  he said: “They all got climate change policies; I would like to hear energy policies as a priority, I would like to hear all three candidates talk about that.”


But he added that “a sane energy policy” would need to incorporate climate change.


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By: Stefan Baumgarten
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