The probable ending of the destocking/restocking phase is a good moment to look back at what has happened to chemical industry volume in recent years. The chart, based on data kindly supplied by Kevin Swift of the ACC, shows how volume has moved, by Region, with Q1 2006 = 100:
Global. Volume in Q2 this year was the same as in Q1 2006. It had grown 9% by Q1 2008, but then fell a disastrous 13% over the next 12 months. Restocking, and the impact of the stimulus programmes, allowed it to recover 4% in Q2, and it has probably risen further in Q3. But essentially, much of the growth seen since 2006 has probably been wiped out.
Middle East/Africa. This Region has seen the best volume performance, and is now 19% above 2006's level. It will rise further over the next few months as more feedstock-advantaged plants come online.
Asia-Pacific. Volume collapsed at the end of 2008, but then made a dramatic recovery, due to China's vast stimulus programme. However, continued growth will rely on consumption recovering in the West, due to the export-orientation of the Asian economy.
N America. This major Region is still 12% below its 2006 level, and saw only a 2% recovery in Q2 this year. This highlights the dramatic impact of the crisis on personal consumption, which accounts for 70% of GDP.
W Europe. Volume fell 16% from 2008's peak to the 2009 trough, but has since recovered by 10%. Much of this was due to support from stimulus programmes, particularly pre-election in Germany.
Latin America. The Region peaked in Q4 2007, having grown only 11% from 2006, and its recovery has been weaker at just 5%.
CEE. This has been the worst affected Region, as governments have been largely unable to fund stimulus programmes, to mitigate the loss of export markets. Volume was down 13% in Q2.
The rationale for the recent stimulus programmes has been to provide a platform for growth to resume, by creating "escape velocity" for the major national economies (as Larry Summers, US economic chief put it). This strategy will now face its major test, as the poor state of many governments' finances forces the scale of stimulus to be reduced.