Growth in global chems to slow in 2008 - ACC

25 June 2008 20:35  [Source: ICIS news]

HOUSTON (ICIS news)--Growth of the world's chemical output will likely slow down to 3.5% this year, compared with 4.5% in 2007, the American Chemistry Council (ACC) said on Wednesday in its mid-year outlook.

The most rapid growth will occur in emerging markets in Asia, the Middle East, eastern Europe and Latin America.

US chemical growth, however, has stalled since the third quarter of 2007, the ACC said. For 2008, the industry will hardly grow at all before improving to 2% growth in 2009.

Overall, the US economy is growing well below average rates, as it struggles with a housing slump, a credit crisis and a record run in energy prices, the ACC said.

"At best, the US economy will continue well below trend for a period, with a timid recovery likely," the group said. However, the report did not rule out a recession.

Boosting the US economy are strong exports, lean inventories, healthy corporate balance sheets and monetary and fiscal stimuli, the group said.

In the rest of the world, growth is moderating in western Europe and a slowdown is becoming more pronounced in Japan, the ACC said.

Emerging markets in eastern Europe and Asia are experiencing the strongest growth, the ACC said. Latin America and the Middle East are benefiting from emerging-market momentum.

Growth in emerging markets should  maintain world economic growth to 3.8% through 2009, before rising to an above-average pace in 2010, the ACC said.

On the other hand, global inflation will rise to 5.3% this year, up from 3.9% in 2007, the ACC said. The US credit crisis could spread to other parts of the world.

Another threat includes a post-Olympic economic bust in China, the group said.

The following graph lists the business of chemistry output, in terms of year-over-year percentage change.

	07	08	09	10
N America	1.2	0.3	1.9	2.4
Latin America	2.9	3.3	3.4	3.2
West Europe	2.0	2.0	2.4	2.4
East Europe	5.9	4.1	4.6	4.3
Africa and Mid East	4.5	4.6	4.4	4.0
Japan	1.9	-0.3	1.4	1.7
Asia Pacific excludes Japan	13.9	9.1	8.5	8.6

source: ACC

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