Goldman Sachs today halved its estimate for global ethylene growth to ~2.5%, and slashed its earnings estimates for some major US companies. Analyst Robert Koort warns:
“Our outlook for earnings growth has decelerated substantially in recent weeks … Our economists now expect US GDP to grow only 1.7% in 2011 and 2.1% in 2012 vs. consensus estimates of 2.5% and 3.0%. …
They assign a one-in-three risk of renewed recession in the next 6-9 months. We also expect fallout from the recent US sovereign credit rating downgrade by S&P and the associated stock market weakness to erode business confidence, further decelerating growth prospects.”
And he adds:
“Based on our prior global GDP growth assumptions we estimated NTM ethylene demand growth at close to 5%, but our current less-robust GDP growth outlook suggests ethylene demand will grow at roughly half that rate.”