“A real global downturn in the industrial sector”

ECRI Jul10.pngThere are mounting signs that 2010 could prove a Year of 2 Halves in terms of economic growth.

Interviewed by Bloomberg last month, the MD of the Economic Cycle Research Institute (ECRI), Lakshman Achuthan, warned that their indicators showed “A real global downturn in the industrial sector is starting right here and right now“. They saw Chinese exports looking particularly weak in H2, closely followed by industrial production.

Now the ECRI Index for the USA (above) is clearly forecasting a renewed downturn, with a reading of -10.5. As Dave Rosenberg of Gluskin Sieff notes, “its never been here before without there being a recession“. And the indicator itself is very credible, having only once produced a false forecast in the past 40 years.

Whilst their colleagues head for the beach and a well-deserved summer break, prudent CFOs will be developing their contingency plans to ensure H1’s gains are not lost during any H2 downturn.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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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One Response to “A real global downturn in the industrial sector”

  1. hedonist 28 July, 2010 at 11:23 am #

    If you read the observations of these two wizards together, you get the finest insights into whats happening, and whats in store.

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