GOOD RIDDANCE 2009! Surviving through the worst economic recession since the Great Depression was no easy task. But the chemical industry is ready to make a comeback in 2010.
Sure there are worries. The global banking sector is not out of the woods yet, illustrated by the Dubai World debacle, along with continuing credit deterioration in European countries such as Greece, Ireland, Spain and Austria. The commercial real estate and consumer credit markets remain shaky.
In the Western world, unemployment remains stubbornly high, and housing markets stagnant.
But economic recoveries from the depths of a downturn can be surprisingly robust, even in the face of substantial obstacles. Large chunks of manufacturing capacity have been eliminated and inventories trimmed to the bone. Particularly in severe downturns, companies go too far.
If pent-up demand rears its head, we will see a strong recovery in prices and profitability.
In 2002-2003, the chemical industry suffered through what many claimed was "the worst downturn in industry history." And the recovery was widely expected to be much weaker than in the past.
The subsequent bounce was not only strong, but one of the longer periods of profitability in the cycle.
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