Goldman halves global ethylene growth estimate

Goldman.pngGoldman Sachs today halved its estimate for global ethylene growth to ~2.5%, and slashed its earnings estimates for some major US companies. Analyst Robert Koort warns:

“Our outlook for earnings growth has decelerated substantially in recent weeks … Our economists now expect US GDP to grow only 1.7% in 2011 and 2.1% in 2012 vs. consensus estimates of 2.5% and 3.0%. …

They assign a one-in-three risk of renewed recession in the next 6-9 months. We also expect fallout from the recent US sovereign credit rating downgrade by S&P and the associated stock market weakness to erode business confidence, further decelerating growth prospects.”

And he adds:

“Based on our prior global GDP growth assumptions we estimated NTM ethylene demand growth at close to 5%, but our current less-robust GDP growth outlook suggests ethylene demand will grow at roughly half that rate.”

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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