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Chemicals and the Economy

US heads towards New Normal for housing markets

Major changes are underway in Western housing markets. They are generational in nature, meaning that we are starting to see a New Normal develop in terms of future demand patterns for chemicals and polymers. The past 30 years have seen Western leaders committed to the concept of a ‘property-owning democracy’. Both US President Reagan and […]

US consumer demand growth stalls

The American Chemistry Council has recently updated its invaluable work on US polymer chain inventories. Last December this led the blog to conclude that we would see “a strong H1“, as inventories were low, whilst demand was likely to rise supported by seasonal and stimulus factors. But the ACC’s latest analysis (above) leads to a […]

US housing remains weak as foreclosures rise

The problems in US housing remain a major cause of concern for global chemical markets. As the above chart shows – from the American Chemistry Council (ACC) weekly report – housing starts (blue line) and building permits (red) are still at very low levels. April’s housing starts were up 41% versus 2009 to 672k. And […]

US housing a long way from full recovery

US housing used to be a $35bn chemicals market, with 2.2m housing starts in 2006, each with a $16.7k chemicals value. Last year, total housing starts were just 550k, for a value of only $9bn. And as the chart above shows, from the American Chemistry Council, the annualised rate (blue line) was just 575k in […]

US housing starts 74% below 2006 peak

15% of Americans were either in foreclosure, or at least one payment overdue, according to the Q4 Mortgage Bankers Association survey. This is a record high, but the MBA sees some signs that the numbers may have peaked. It is concerned, however, over the rise in the number of long-term unemployed, now a record 40% […]

US house sales rise as foreclosure increases

The US housing crisis is still getting worse, causing the weekend collapse of Guaranty Bank, the 11th largest US bank failure. As the Wall Street Journal notes, this marks a “new stage” in the banking crisis. Guaranty Financial had bought low quality, “toxic” mortgage loans, and its woes illustrate the “boomerang effect” that is now […]

US housing loans still toxic assets

There are two main views on the financial crisis that began last September. The mainstream view, as expressed by the US Federal Reserve, is that it was a problem of liquidity. Banks became frightened to lend, and so the Fed stepped in as “lender of last resort”. So given time, everything will soon be back […]

US house prices fall again

US house prices continued their downward path in August, and “every region reported negative annual returns”, according to today’s new Case-Shiller index. Nationally, average prices were down 17%, with Phoenix and Las Vegas down over 30% since last August. The recent Panic in financial markets makes a quick recovery even more unlikely. US chemical companies […]

‘Our entire economy is in danger’ – Bush

In early August, the blog noted that politicians were beginning to recognise the seriousness of the economic situation. First, China’s finance minister Liu He warned that ‘an economic restructuring was inevitable’. Then the UK’s finance minister said the ‘global economy was at a 60-year low’, and France’s Prime Minister added that the world was facing […]

US housing starts ‘at 17 year low’

US housing starts, so important to the chemical industry, are now firmly anchored in recession territory. The chart above, from the ACC’s weekly report, shows they are at levels last seen in 1990-1. And with the current disruption in financial markets, it is hard to imagine that a recovery will start in the near future. […]

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