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(ICIS) -- The volatility in chemical and
oil markets indicates that the global economy is going through a structural
change and entering the ‘New Normal’ of lower growth in mature markets,
according to a leading consultant.
Speaking before Monday's launch of a free eBook on the New Normal,
co-author Paul Hodges, chairman of UK-based consultancy International eChem,
said the volatility is being caused by central banks trying too hard to
stimulate economies that should naturally be entering a sustained period of
lower growth.
According to Hodges, the post-war baby-boom generation is ageing, and
therefore spending less money on big-ticket items such as new cars and bigger
homes. The oldest baby boomers are 65 this year and their average age is 53. But
central banks have missed this demographic change and are trying too hard to
stimulate economic growth despite the structural fall in demand.
The growth in demand for chemicals and other commodities seen in the
first quarter of 2011 may not be based on real demand, but speculative buying
based on the fear of continued rising oil prices, Hodges said.
Hodges said conditions are not yet the same as the crash of late 2008
because the oil price has not collapsed.
He advises chemical companies to check stock levels and check with
downstream customers, not just with convertors but with retail customers.
In the long run, innovative chemical companies can emerge as winners from
the New Normal if they are properly prepared, said Hodges. They can create
products suitable for the ageing baby-boomer population in the West, and meet
the needs of people moving into the first stages of consumption.
mrcplast.com
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