Demographic slowdown hits company results

recession logo right.jpgAre you a typical employee in the chemical industry (aged in your 30s or 40s)? Have you noticed that you spend rather more money than your parents? Then you may have spotted the reason for the more difficult economic conditions that your company is now encountering.

There is little doubt about the seriousness of the situation. The evidence is contained in the statements made by the majors when releasing Q3 financial results recently. They all reported difficult market conditions and a weaker profit outlook.

Thus the blog’s new article in ICIS Chemical Business sets out to explain how demographics are now creating a major paradigm shift. 2013 marks the point at which the average Western BabyBoomer reaches the New Old 55+ generation, when spending slows dramatically and becomes focused on replacement rather than new products.

Many executives will now have to unlearn much of what they have learnt as they climbed the corporate ladder during the SuperCycle. ‘If you build it, they will come’ is no longer a viable strategic mindset. Over-optimistic market assessments will no longer be rescued by seemingly constant growth and the arrival of ‘pent-up demand’.

Instead, the article highlights the need for them to learn new tools with which to sustain growth. Business model innovation will be essential to meet the needs of those market sectors with future growth potential. So will technical innovation, as the successful products of the future are likely to be based on ‘needs’, rather than the mere ‘wants’ seen in the SuperCycle.

Please click here if you would like to download a copy.

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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