Crystal ball.jpgThe blog will publish its annual Budget Outlook for 2011 next weekend. And so as usual, its now time to review last year’s Outlook. Past performance may not be a perfect guide to future outcomes. But it is one of the best that we have.

The 2010 Outlook was titled ‘Budgeting for a New Normal’, and it argued that over the next few years:

We will start to see a rebalancing of the global economy. The West will see lower consumption, as people rebuild their savings, and borrow less. In turn, this will mean lower export demand for the emerging economies. The outcome will be a more sustainable world economy, but it will be a difficult journey.”

Today, this still seems to be an accurate view, particularly the sense that it will be a “difficult journey“.

The blog’s 2008 Outlook ‘Budgeting for a Downturn’, and its 2009 ‘Budgeting for Survival’, meant it was one of the few to forecast the Crisis. Last year, however, the blog was more positive about the outlook than most forecasters, expecting that “2010 should be a better year for the chemical industry, as demand grows in line with a recovery in global GDP“.

It also correctly balanced this optimism by warning that there would be no “quick V-shaped return to the 2003-7 Boom years“, and suggesting that:

Governments will worry about budget deficits, and may well scale down support for critical end-uses such as autos and housing. Equally, major amounts of new capacity, planned during the Boom years, will start to come onstream in the Middle East and Asia.”

This led it to fear that “unemployment is set to become a key political issue in the West”. Unfortunately, this has also been proved correct. So have its concerns that the expected recovery in demand would put “great strains on cash-flow“, and that speculative bets on “oil prices linked to traders’ bets on the US$’s value will continue“.

However, although it identified this latter factor, it clearly underestimated its likely longevity, with oil so far averaging around $75/bbl versus its suggestion that “$50/bbl might be an average price“. The blog will keep this lesson in mind when posting its Outlook next weekend.

The blog’s aim is to ‘share ideas about the influences that may shape the chemical industry over the next 12 – 18 months’. It hopes that its 2010 Outlook again helped readers to better prepare for today’s more difficult economy.


China, USA, give cash subsidies to electric autos


Greater use of electric autos is a win-win for the chemical industry. They will ...

Learn more

Oil "would be $30/bbl" without financial speculators


The blog’s argument that oil prices are now being entirely driven by finan...

Learn more
More posts
Chemical industry has key role in helping to create a more sustainable world

The chemical industry has a critical role to play in enabling the world to “build back better&...

The state of the global economy in 2020

Last Wednesday, I gave the opening presentation for the ICIS PET Conference and looked at whether th...

Reality dawns for business as No Deal Brexit approaches

I warned before the June 2016 Brexit referendum that Brexit was all about politics, and Boris Johnso...

Local circular plastics solutions to replace mega projects business model

NEW YORK (ICIS)–There will be a paradigm shift away from mega crackers producing massive volum...

Global chemical industry – key trends for success in today’s New Normal

The chemical industry is the best leading indicator for the global economy. On Friday, I had the pri...

Oil prices signal potential end to the V-shaped recovery myth

Oil prices have moved into another ‘flag shape’ – which previously provided critic...

Bankruptcies now the key risk as hopes for V-shaped recovery disappear

Governments, financial markets and central banks all originally assumed the Covid-19 pandemic would ...

Reshoring set to create Winners and Losers as advanced manufacturing takes over

Not many companies still operate in the same way as 500 years ago, or even 50 years ago. But in manu...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more