More Muddle And Confusion

By John Richardson

Manufacturers yesterday reported rising output and improved employment prospects in the US, Europe and Asia.

China’s Purchasing Managers’ Index (PMI), involving a survey of more than 700 manufacturers, increased for the eighth straight month in a row – and is now back to where it was in May 2008. This is exactly the same length of time that China’s chemical imports have been booming.

In the US, too, the Institute of Supply Management (ISM) survey for October showed that the employment index had expanded for the first time in a year.

But dig a little deeper and the same old doubts and muddle re-emerge.

New orders rose at a slower pace in October than in September, added the ISM. This could be an indication that the process of re-stocking is coming to an end, points out the Short View in the Financial Times.

The rate of bank lending to private companies has turned negative in the Euro Zone for the first time since the data was first gathered, according to this post on The Economist’s Buttonwood blog.

Nobody in the chemicals industry is getting excited about the prospects for 2010, least of Jurgen Hambrecht of BASf on the release of the German giant’s Q3 results..

He warned of the need for more concerted efforts by governments and industries, as there was no easy way out of the crisis.

One easy way might be China. But as we keep going on and on about, what are all the chemicals being shipped to China going into?

As long as this uncertainty lingers, so will the fear that it will come to a sorry and sudden end.

If you’re selling in China and merely looking towards your year-end bonus, this endless head-scratching might not matter if China can hold its ground until end-December.

But anyone with a slightly longer-term perspective needs to be a little more worried.

, , , ,

Leave a Reply