New Year may surprise – US chemical trade group

31 December 2009 19:26  [Source: ICIS news]

TORONTO (ICIS news)--The new year may be one of surprises, with global growth primarily driven by emerging markets, US chemical industry trade group American Chemistry Council said on Thursday.

“In the short-term, upside surprises are likely,” ACC chief economist Kevin Swift said in the trade group's weekly economic update update.

Inventory destocking has come to an end and a return to inventory accumulation would translate quickly into higher production, thus providing the upside surprises to economic growth, he said.

Beyond the short-term, however, the US would cope with “a new normal” of after-effects from the recent crisis, it was the emerging markets that provided hope for sustained global growth, Swift said.

“These emerging markets are in much better health and are benefiting from increasing trade with each other,” he said.

Relative strength in emerging economies was translating into gains in commodity prices, as well as improvement in US exports, which provided support for US economic growth in 2010, he said.

Recent US economic indicators provided further evidence of improvement, Swift said.

He noted improved consumer confidence, as well as strength in the purchasing manager’s index (PMI), which rose to a nearly four-year high, suggesting some momentum in the manufacturing sector during December.

In the chemical industry, a few individual product reports suggested improving activity, he said.

These trends were reinforced by increases in US chemical railcar traffic, which rose 2.8% year-over-year on a 13-week moving average basis.

Chemical railcar loadings data are seen as the best real time indicator of chemical industry activity, especially for polymers and other basic chemicals.

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By: Stefan Baumgarten
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