25 March 2009 23:28 [Source: ICIS news]
HOUSTON (ICIS news)--The worst economic downturn since 1938 will persist and a sustainable recovery will not come before the end of 2011 at the earliest, the president of a petrochemical consultant firm said on Wednesday.
“Chemical production has fallen off a cliff,” said Gary Adams, president of Chemical Market Associates Inc. (CMAI). He spoke at the company’s 2009 World Petrochemical Conference, held in ?xml:namespace>
The petrochemical industry is suffering from excess capacity at a time of falling demand, he said.
Last year, consumers were hit with escalating fuel costs and a weakening economy, he said. They cut back on buying consumer goods, a trend that crept all the way to chemical producers.
“It worked itself up the chain quite rapidly,”
In past downturns, capacity and demand had remained in sync,
Companies will likely shut down high-cost production in the
However, forces are at work that will lead to a recovery,
The drop in fuel and construction costs also amount to a large tax cut that will help the economy as well,
Moreover, such downturns provide companies with good opportunities expand into new regions or to buy or sell off businesses.
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