In its end-of-the-year assessment and outlook for the chemical enterprise, the American Chemistry Council concludes that “the recovery from the worst recession since the Great Depression has stalled.” The European Chemical Industry Council (CEFIC) is also concerned about economic growth. Both industry trade groups say chemical production in their regions will grow at a slower pace in 2012 than it did this year.
Citigroup's Economic Surprise Index; red line corresponds to an accurate
prediction. (Credit: Brad Plumer)
ACC’s pessimistic appraisal takes into account evidence of an emerging recession in Europe, a slowdown in the U.S. economy, and signs of less robust growth in Asia. “Is it 1937, when another recession followed a few years after the Great Depression,” asks ACC’s Chief Economist T. Kevin Swift, “or 1995, which was just a midcycle slowdown?”
The answer is likely not a simple one. Economic prospects going forward “represent a two-speed world” in which Asia outpaces other regions, write Swift and ACC colleagues who prepared the report.
Developed nations, they say, will be constrained by debt, adverse demographic factors, and tight fiscal policies that could lead to slow growth and recession. Emerging markets will continue to grow, but not as strongly as in 2010, the economists add.
After a strong rebound in 2010 from the Great Recession of 2008, the chemical enterprise encountered significant headwinds this year from high energy prices, a devastating earthquake in Japan, Europe’s monetary crisis, and a slowdown in China, ACC economists say. After falling 4.4% in 2009, global chemical production rose 10.0% in 2010, but it will increase only 3.5% this year, they note.
I'm amused to learn of Citigroup's "economic surprise index" , which shows the correlation between predictions of the US economy and the actual data. I've drawn a line through the zero line, which is the value that corresponds to an accurate prediction. As you can see, things aren't going so well in the forecasting biz.
That said, Kevin Swift has only pretty much had to decide at what rate the chemical economy is going to drop for a while now (I keed! I keed!)
Best wishes to all of us.