US to see anaemic growth in 2012, but EU crisis threatens - ACC

12 December 2011 16:27  [Source: ICIS news]

WASHINGTON (ICIS)--The US economy likely will see continued but anaemic growth in 2012, the American Chemistry Council (ACC) said on Monday, but the nation’s recovery remains fragile and faces multiple risks, especially the EU debt crisis.

In its annual year-end situation report and outlook for the year ahead, the council cautioned that “the global economy has reached a critical state”.

“Although the global economy is in its third year of recovery, the pace of improvement slowed,” the report said, citing higher energy prices, the earthquake and tsunami in Japan, the eurozone crisis and slowing growth in China.

“The likelihood is that the US will avoid another recession but that economic growth will not reach long-term trend levels until 2013,” the report said. 

In normal economic times, what economists call “trend growth” would mean annual US GDP expansion rates of 3% to 3.5%.

“The recovery is fragile and multiple risks remain,” the analysis said, “the largest of which is the spread of an emerging recession from Europe.”

“While not the most likely scenario, the probability of another [US] recession remains elevated,” the council’s economic advisors said, adding that “The European debt crisis continues to present one of the greatest risks to the world economy.”

The council’s economic report also noted that “recent indicators suggest that the strong manufacturing recovery in the US has lost momentum”, which is worrisome because “the manufacturing sector represents the primary customer base for chemistry”.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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