The blog believes that the landscape has changed during the current downturn. We came into it on the back of a major boom in consumption, supported by reckless lending and borrowing. This mind-set seems unlikely to return quickly. Instead, as the period of destocking/restocking comes to an end, we may face a “new reality”. This […]
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US corporate earnings were down a record 89% in Q1 versus the previous 12 months at just $7. Q2 saw only a minor improvement with earnings at only $8. Its interesting, therefore, to see market expectations for 2010. The chart is based on S&P analyst forecasts, and shows “reported earnings” (red line) are expected to […]
The above chart, from Moncef Hadhri’s excellent monthly report from CEFIC (the European chemical industry association) provides an interesting snapshot of the state of the EU chemical industry. On the positive side, it shows that recovery from the destocking period was well underway in June (the latest data available). Volume (green line), had risen 10% […]
Some readers may remember the 2007 and 2008 reports from the Bank of International Settlements (the central bankers’ bank). In July 2007 the blog titled its summary ‘4 risks to the world economy’, and July 2008′s was titled ‘The difficult task of damage control’. Not all of the BIS’s forecasts proved correct, but it was […]
Coincidentally, both the US Federal Reserve and the Bank of England yesterday signalled the probable end of the ‘the recession’ yesterday. But as the blog noted last month, statistics don’t tell the whole story. The issue is that economists usually define recession as simply being 2 or more quarters of negative growth. Automatically, therefore, any […]
After destocking, and then restocking, what next? The blog is a great believer in following the insights of the major retailers, who have been consistently “on the money” in their analysis. Thus it takes very seriously the comments of Wal-Mart CEO, Mike Duke, who has joined the camp of those who believe we face a […]
Globalisation flourished whilst economic growth was strong. Jobs lost in Western countries were replaced by new jobs. Whilst cheaper production offshore kept consumer prices low, as well as bringing more people into the world economy. But today’s economic downturn means this virtuous circle is turning vicious. Western countries are becoming more protectionist and hope to […]
China was the first major country to feel the impact of the financial crisis. In August 2008, it noted that “the era of low costs and high growth has come to an end for China, and an economic restructuring is inevitable”. Since then, of course, China’s export-dependent economy has meant it has been one of […]
Today is Labor Day holiday in the USA. But sadly, the latest news on jobs remains deeply worrying. As the chart from the New York Times shows, jobs are still being lost (blue line), long after recovery had begun in downturns from 1974 – 2000. And far more jobs have already been lost. Total jobs […]
One of the blog’s major themes is that it fears the idea of a quick V-shaped recovery will prove wishful thinking. New figures from the Bank of England seem to bear out its caution. The slightly complex chart shows that net UK lending for mortgages (yellow line, then red diamond) has been falling steadily since […]
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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.