The global economy really isn’t getting any better. That’s the key conclusion from the blog’s quarterly survey of company results for Q2.
Of course, some companies are doing well – either because of shale gas economics, or their own market positioning. But consumer giant Unilever summarised the general picture very well:
“Market growth continued to slow in emerging countries, particularly in Asia, as macro-economic pressures weighed on consumer spending in our categories. Developed markets remained weak with little sign of any recovery in North America or Europe“.
Its global rival Nestle described a similar picture, with its successes being achieved despite headwinds in most of its major markets.
Of course, each quarter we are assured by policymakers that recovery is now certain. But every quarter we are disappointed. This month, even the new deputy chairman of the US Federal Reserve, Stanley Fischer has admitted that:
“Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back”
And in the past few weeks it has become clear that some major investors, as well as leading central bankers, are starting to take a serious interest in the blog’s Demographic Scenario.
The benefit of this Scenario is that it explains the economic developments of the past 50 years in a simple and common-sense fashion. It does not require us to believe that central bankers have somehow become ‘Masters of the Universe’, able to change people’s entire behaviour via the simple manipulation of monetary policy.
As a result, the blog is now making a ‘Speed Read’ available of the background to the Scenario’s central arguments. It collects together the 2 page summaries from ICB that accompanied the monthly publication of each chapter of ‘Boom, Gloom and the New Normal’, written by the blog and co-author John Richardson.
Please click here to download the ‘Speed Read’ (no registration required).
The blog is also now offering a new strategy workshop to help your business realign itself with the profitable growth areas of this New Normal.
Air Liquide. “New contracts in growing markets”
Air Products. “Strong sales for its electronics and performance materials and higher pricing for its merchant gases”
Akzo Nobel. “Long-running cost and efficiency programme starts to bear fruit”
Arkema. “All divisions registered lower sales and EBITDA margins in Q2”
Ashland. “Global restructuring programme and a $12m charge because of a pension adjustment”
Axiall. “Dramatically lower profits and somewhat lower sales”
BASF. “Expects the global economy to post a weaker growth than previously expected this year”
BP. “In the petrochemicals business, the challenging environment is expected to continue”
Bayer. “Higher volumes, lower raw material prices and our efficiency improvements”
Borealis. “Stronger margins from polyolefins offset weaker-than-expected results in fertilizers”
Braskem. “Spreads of thermoplastic resins and key basic petrochemicals fell in Q2”
Brenntag. “Modest signs of recovery in Europe/NAFTA and ongoing challenges in LatAm and Asia”
Celanese. “Sales rose as well as equity in the net earnings of affiliates”
CP Chem. “Higher realised olefins and polyolefins chain margins”
Clariant. “Volatile and challenging business environment compared to the previous year”
Croda. “Weak consumer demand in Europe impacted the business, particularly in personal care”
Dow. “Ongoing slow growth and volatility in the global marketplace”
DSM. “Weaker performance of polymer intermediates, particularly caprolactam”
DuPont. “Drive greater growth and value with a simplified, streamlined support structure and a smaller cost base”
Eastman. “Net sales were $2.46bn, up less than 1%”
Evonik. “Pricing pressure continued to weigh on profits”
ExxonMobil. “Margins were flat as improved commodities were offset by weaker specialties”
Huntsman. “Improved pricing and stronger demand for key products”
INEOS. “US cracker business environment was strong with top of cycle margins and high operating rates”
Indorama. “Most producers operating at below cost over last two years”
K&S. “Given the starting position on global potash markets, we had a solid first half of the year”
Kemira. “Currency headwinds and divestments”
LG Chem. “Overall performance has decreased due to stronger Won and slow recovery of sluggish industry”
Lanxess. “Continuing low earnings level and increasing competition show the need for further action”
Lonza. “Implementation of growth projects and restructuring”
LyondellBasell. “Jump in profit was driven primarily by the American olefins and polymers business”
MOL. ““The main driver was an adverse external environment”
Methanex. “Industry environment remains favourable, with steady demand and limited new supply additions expected”
Nova. Lower margins in its olefins operations in Joffre, Alberta, and Corunna, Ontario”
Novozymes. “Positive sales impact from its partnership with US agrochem giant Monsanto”
Nestle. “N America trading environment remained subdued. Latin America was helped by pricing, reflecting inflationary pressures…Europe a deflationary environment where consumer confidence remains fragile…China was challenged, but we see fundamentals improving”
OMV. “Performance was lower than the preceding three-month period, primarily because of a decrease in ethylene spreads”
Olin. “Lower volumes and lower prices meant that netbacks declined about 11%
PKN Orlen. “Petrochemical model margin was recorded at €741/t in Q2 against €729/t in 2013
PPG. “Volume growth and improved year-over-year earnings in all major regions”
PTT. “Significant decrease in paraxylene price pressured by supply surplus”
Petronas. “Heavy plant turnarounds and planned maintenance activities during the period”
PolyOne. “Specialty now contributing two-thirds of our segment income”
Petro Rabigh. “Higher prices and sales volumes of its petrochemical products”
Praxair. “Sales growth was driven by new projects in North America and Asia, as well as disciplined price execution”
Reliance. “9.3% year-on-year increase in revenue”
SABIC. “Higher output and sales volumes”
SCG. “Chemicals division posted Q2 profit down 14% year on year, despite a 24% jump in sales”
Shell. “Improved base chemicals industry conditions mainly in North America”
Solvay. “Transformation is delivering on all fronts”
Synthomer. ““Strong competition between glove manufacturers has caused ongoing margin pressure”
TVK. “Improved operational efficiency, favourable currency effects, and lower energy costs”
Tasnee. “Improved margins at its petrochemicals unit, and higher sales volumes”
TOTAL. “Petrochemical margins remained high in the US but retreated in Europe and Asia”
Trinseo. “Lower costs in styrene and butadiene”
Tronox. “Sales volumes increased across multiple products and geographic regions”
Unilever. “Market growth continued to slow in emerging countries, particularly in Asia, as macro-economic pressures weighed on consumer spending in our categories. Developed markets remained weak with little sign of any recovery in North America or Europe”
Versalis. “Increased oil-based feedstock costs, continued weakness in commodity demand, which reflected slow economic growth and increasing competition from Asian producers”
Vopak. “Lower revenues and higher depreciation costs”
Wacker. ““Rising volumes, better prices for polysilicon and good coverage of fixed costs”
Westlake. “Benefit from low-cost ethane-based ethylene production”