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The recession of 2001 came on much faster than anyone expected. At this time last year, most economists, and C&EN, expected a slowdown in 2001, but nothing like what has been seen this year.
Most economists at that time were working from 10 months of data, at most. Another two months might have spelled the difference between predicting slower growth and seeing an actual downturn in economic activity, along with rapidly rising energy costs that affected consumers and industry, especially the chemical industry, with its power and feedstock needs.
The U.S. chemical industry was negatively affected, but in some ways foreign chemical industries were helped by the U.S. economic situation. U.S. chemical products became less competitive, and the U.S., because of this lack of competitiveness and the strong dollar, became an attractive destination for exports from foreign countries.
Next year, economists are predicting a modest recovery, but they are uncertain just when it will begin. Forecasts range from the end of the first quarter to sometime early in the third quarter. And
they also predict that parts of the chemical industry will start growing again.
Canada, linked as it is to the U.S. economy, will show a decline in chemical activity this year. This decline will slow petrochemical investment in much of the country, and recovery probably will not begin until sometime in third-quarter 2002.
Despite struggling economies, or perhaps because of them, the chemical industries in Latin America are restructuring and consolidating, making them more competitive in world markets, a trend that producers are hoping will continue next year and into the future.
European economies also have been faltering, but economists there are predicting a shallower decline. Germany, however, has been the hardest hit because of the U.S. slowdown and the accompanying drop-off in exports of chemicals to the U.S.
In the Asia-Pacific region, the attention has turned from the fragile state of the U.S. economy to the even more fragile Japanese economy. Although the downturn in the U.S. has affected the chemical industry in the Asia-Pacific region, economists seem to be more worried about the ripple effects of any economic disruption in Japan.
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Chemical industry should post modest increases next year against a discouraging 2001.
Declining profitability and lower sales yield big concerns about the future.
Economic uncertainty hasnt stopped this region from making steady improvements.
European industry facing difficult times foresees little upturn until year-end 2002.
Despite areas of growth, the fragility of the Japanese economy threatens the entire region .
World Chemical Outlook
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