January Global Production Falls on Lower Sales - Chem Group
HOUSTON (ICIS news)--Global chemical industry production fell in January for a third consecutive month due to customer destocking and declining sales, the American Chemistry Council said on Friday.
The ACC’s Global Chemical Production Index fell 0.9% in January, following a 3.9% decline in December and a 3.3% decline in November. On a year-over-year basis, production was down 7.8% from the same three-month period a year ago, the ACC said in its weekly economic report.
The January decline was broad based, according to the report, and weakness extended to Africa and the Middle East.
“Amid customer destocking, sales have declined and orders are off significantly,” the report said.
In North America, the largest declines by sector occurred in man-made fibres, petrochemical and organic chemicals, plastic resins and specialty chemicals, the report said.
The drop marks the fifth time in six months the index has declined after global activity peaked in July, and near-term expectations were not any better. The ACC said that leading indicators of global industrial production “continue to suggest additional weak activity in underlying final demand through the first half of the year”.
Other indicators revealed comparable declines.
The Conference Board reported that the consumer confidence index fell 12.4 points in February, “far below expectations” for a more modest decline and reaching an all-time low. The situation will likely continue to hamper economic growth, the ACC said.
Likewise, existing home sales and new home sales each fell by larger-than-expected percentages in January, showing weakness in critical end-markets for chemicals. Existing home sales were off 5.3%, falling to an annual pace of 4.49m units, while new home sales fell 10.2% to an annual pace of 309,000 units.
“Both housing reports indicate that the housing market hasn’t yet hit bottom,” the ACC said.
Moreover, the 6.2% decline in fourth-quarter GDP marked the worst quarterly contraction since 1982.
“There is a growing reticence among businesses to boost capital investment in the face of a global recession and heightened uncertainty,” the ACC said.
The ACC’s Global Chemical Production Index fell 0.9% in January, following a 3.9% decline in December and a 3.3% decline in November. On a year-over-year basis, production was down 7.8% from the same three-month period a year ago, the ACC said in its weekly economic report.
The January decline was broad based, according to the report, and weakness extended to Africa and the Middle East.
“Amid customer destocking, sales have declined and orders are off significantly,” the report said.
In North America, the largest declines by sector occurred in man-made fibres, petrochemical and organic chemicals, plastic resins and specialty chemicals, the report said.
The drop marks the fifth time in six months the index has declined after global activity peaked in July, and near-term expectations were not any better. The ACC said that leading indicators of global industrial production “continue to suggest additional weak activity in underlying final demand through the first half of the year”.
Other indicators revealed comparable declines.
The Conference Board reported that the consumer confidence index fell 12.4 points in February, “far below expectations” for a more modest decline and reaching an all-time low. The situation will likely continue to hamper economic growth, the ACC said.
Likewise, existing home sales and new home sales each fell by larger-than-expected percentages in January, showing weakness in critical end-markets for chemicals. Existing home sales were off 5.3%, falling to an annual pace of 4.49m units, while new home sales fell 10.2% to an annual pace of 309,000 units.
“Both housing reports indicate that the housing market hasn’t yet hit bottom,” the ACC said.
Moreover, the 6.2% decline in fourth-quarter GDP marked the worst quarterly contraction since 1982.
“There is a growing reticence among businesses to boost capital investment in the face of a global recession and heightened uncertainty,” the ACC said.
source: www.ICIS.com
