Changes in US housing values continue to exert a larger and more important impact upon household consumption than do changes in stock market values“. That’s the conclusion of an important new study by the developers of the main S&P Case-Shiller US House price index. The chart above, based on US Census Bureau data, shows the […]
Tag Archives | consumer spending
The fascinating chart above from Dave Rosenberg at Gluskin Sieff confirms the blog’s fears above the impact of today’s high oil prices on US consumer spending. It shows that consumers in the world’s wealthiest econony have very low expectations for their real income. These are now at the 4th lowest level since the survey began. […]
The blog has been in the USA this week, speaking at the bi-annual Global Coatings Summit. Coatings sales are worth $75bn globally, and are a key market for chemicals. Interestingly, much of the discussion centred around sustainability. In spite of the downturn, it is clear that consumers are now very focused on carbon footprint as […]
Benzene is the blog’s favourite leading indicator for chemical demand, due to its widespread use in the industry. Its recent price movements versus its naphtha feedstock, may therefore be telling us something quite important about changing supply/demand balances. As the chart above shows, based on ICIS pricing, its spread versus naphtha has become very volatile […]
All is clearly not well with the Western consumer. The stimulus programmes have not given them renewed confidence about the future. Instead, they are focused on the prospect of higher taxes and rising unemployment. Two examples make this mood change very clear: • As the above slide shows, EU auto sales are falling off the […]
The US is 25% of the global economy, and its performance matters enormously to the chemical industry. So it was good news that US GDP growth stabilised at 2% in Q3, versus the 1.7% level of Q2. But the underlying trends during 2010 are worrying, as the above chart shows: • Sales growth (blue line) […]
In the last of its Budget Outlook analysis, the blog today looks at the major changes underway in China. These are typical of many emerging economies, including India, and could potentially have a big impact on chemical demand. The key issue is that China’s leadership has recognised the current export-driven development model no longer works. […]
As promised, the blog is today looking at a key European consumer trend, as part of its Budget Outlook week. 70% of chemical sales are consumer-related, so changes in these trends are very important. Earlier this month, it shared a platform in Bahrain with Thibaut Eissautier, Chief Procurement Officer of McBride, Europe’s leading own-label producer […]
Consumer spending, particularly in the developed economies, is critical to the chemical industry. And there is increasing evidence that a two-tier pattern is developing: • Wealthier consumers are maintaining their spend, helped by lower interest costs on mortgages and recent stock market gains • Lower and middle-income consumers remain under pressure, as they are more […]
The US consumer accounts for 16% of total global GDP, with a value of $10trn. By comparison, total Asian consumption is under $5trn. China’s consumption in 2008 was just $1.6trn, about equal to the UK. Changes in US consumer behaviour are therefore critical to global GDP, and hence to chemical demand. The chart above, from […]
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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.