Consumer demand

All happy property owners are alike, each unhappy owner is unhappy in their own way

“The entire commercial real estate space has to reset. No one really knows where the values are…You can’t raise rates this quickly and not expect a financial shock. We’re already working on transactions at 50% on the dollar: the equity is wiped out and half of the loan is wiped out.”

All happy property owners are alike, each unhappy owner is unhappy in their own way Read More

Food banks spread in richer countries, hunger spreads in poorer countries, as Europe’s fertilizer crisis continues

Unfortunately, the problems look set to get worse rather than better. And the oil price rise caused by the Israel/Gaza crisis adds to the problems caused by the Ukraine invasion. A difficult winter, and 2024, lie ahead.

Food banks spread in richer countries, hunger spreads in poorer countries, as Europe’s fertilizer crisis continues Read More

Smartphone decline highlights the end of the profitable BabyBoomer-led ‘middle-market’

The downturn in the global smartphone market highlights the need for companies to focus on the Value segment and Services as the Middle Market disappears. iPhones are now 49% of the booming second-hand market, allowing Apple to gain more Services revenue via its App Store.

Smartphone decline highlights the end of the profitable BabyBoomer-led ‘middle-market’ Read More

The next car you buy will probably be Electric, and you may not need to buy another

As the photos from New York in 1900 and 1913 remind us, transitions happen very quickly once they get underway. One day, we are saying “it will never happen”. The next, we are telling our friends “I can’t understand why it took so long”.  So it seems safe to assume that the auto industry will see major change in the next few years.

The next car you buy will probably be Electric, and you may not need to buy another Read More

Plastics recycling starts to take off, and potential Winners & Losers emerge

Russia’s invasion has dramatically accelerated the need to transition from fossil fuels to renewables, and from single-use plastics to recycled product. In turn, this will create Winners & Losers. Some companies will decide to take advantage of the new opportunity. Others will continue to hope the issue will go away.

Plastics recycling starts to take off, and potential Winners & Losers emerge Read More

Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales

The smartphone market has now been in decline for 5 years. And whilst the Fed would clearly love to get stocks racing to the moon again, history suggests that Apple’s CFO is likely to be right when auggesting that cost control, not innovation, is likely to be key for the future.

Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales Read More

Global auto fleet goes electric as “the electrification of everything” begins

The ‘digitalization of everything’ has transformed the global economy over the past 30 years. The rise of the internet is just one example. Now electrification is set to have a  similar impact, starting with the world’s largest manufacturing industry. Fasten your seatbelts for the ride!

Global auto fleet goes electric as “the electrification of everything” begins Read More

The car market is crashing

Winners and Losers are becoming inevitable in the world’s largest manufacturing industry. Companies and their suppliers have to manage fixed costs to survive the recession. But they also have to invest in EV/AVs if they want to have a business in the future.

The car market is crashing Read More

Europe sets new rules to boost plastics recycling, as Russia’s invasion highlights risks with fossil-fuel dependence

Last week’s UN Conference confirmed that curbs on the production of virgin plastics are clearly on the way. Plastics companies have the technology and expertise needed to make advanced recycling of plastics a major success. They now need to accelerate their commitment if they want to remain a growth industry for the future.

Europe sets new rules to boost plastics recycling, as Russia’s invasion highlights risks with fossil-fuel dependence Read More

Europe’s bread price crisis highlights growing risk of food shortages and higher prices in 2023

Food shortages and price rises are inevitable next year. So we all need to reduce the 25% of food now thrown away each year in the developed world. And in the developing world, we need to reduce the 25% lost due to logistics and storage failures.  The less we waste, the more there will be to eat. 

Europe’s bread price crisis highlights growing risk of food shortages and higher prices in 2023 Read More

US Supreme Court throws a lifeline to Democrats for the mid-term elections

Social and political issues were always more important than economics before the SuperCycle.  And now they are resurfacing again. Does an individual woman have the right to choose what to do with her body? Or can judges tell her what she can, and can’t do? It is early days, but many women may choose to vote Democrat because of this issue in November.

US Supreme Court throws a lifeline to Democrats for the mid-term elections Read More

Europe’s plastics companies need to step up the pace on recycling if they want to stay in business

Europe’s plastic industry is at a critical turning point. Profitability is falling as the recession bites. But it cannot just cut back and hunker down. Instead, it has to take a lead in building major new recycling capacity, as current markets and feedstocks start to disappear.

Europe’s plastics companies need to step up the pace on recycling if they want to stay in business Read More

The world’s real estate bubbles start to burst, as central banks pivot to focus on inflation

Problems in the housing market aren’t just confined to the US, UK, Germany and China. The average house price/income ratio is now back to the highest level since records began. And the problem for homeowners is that potential buyers are already starting to disappear as mortgage rates rise – and affordability reduces.

The world’s real estate bubbles start to burst, as central banks pivot to focus on inflation Read More

Automakers, governments, start to prepare for the launch of Autonomous Vehicles

Automakers are ahead of the game in terms of strategic planning. They soon realised the move to EVs meant their traditional business model, based on proprietary engine technology, would inevitably become obsolete. And so they quickly realised they need to pivot to focus on AVs and become software-driven. The rest of us need to catch up.

Automakers, governments, start to prepare for the launch of Autonomous Vehicles Read More

Samsung stumbles in global smartphone market as Xiaomi overtakes Apple

Smartphone sales confirm that global markets are continuing to pivot to the New Normal world. Back in 2014, Samsung dominated with its middle market positioning. But since then, its position has been squeezed as the market polarises between low-cost Chinese suppliers and Apple’s focus on adding services. Every third smartphone used to be a Samsung.

The post Xiaomi overtakes Apple as Samsung stumbles in global smartphone market appeared first on Chemicals and the Economy.

Samsung stumbles in global smartphone market as Xiaomi overtakes Apple Read More

Brand-owners start to focus on renewable carbon

The original debate on plastics recycling owed its prominence to Ellen MacArthur, the yachtswoman who was appalled by the volume of plastic waste in the oceans, as she sailed round the world. This led her to set up her Foundation, which soon began to work with the World Economic Forum in developing the New Plastics

The post Brand-owners start to focus on renewable carbon appeared first on Chemicals and the Economy.

Brand-owners start to focus on renewable carbon Read More

“One size no longer fits all” as the global smartphone market breaks down into different segments

The pandemic was very good news for some companies, with demand for online activities rocketing. But whilst many parts of the developing world are still suffering, most developed countries are now starting to reopen as vaccinations spread. Western companies are now struggling for chip supplies, due to their lack of local investment. The Chinese market

The post “One size no longer fits all” as the global smartphone market breaks down into different segments appeared first on Chemicals and the Economy.

“One size no longer fits all” as the global smartphone market breaks down into different segments Read More

Biden’s Earth Day Summit puts plastics recycling on the fast track

Plastics has long been the ‘odd one out’ in terms of recycling. Steel, aluminium, glass, cardboard, rubber and paper routinely have up to a 70% rate of recycling. But plastics has been stuck at around 10% for a long time. President Biden’s Earth Day Summit is likely to change this picture, and quickly. The reason

The post Biden’s Earth Day Summit puts plastics recycling on the fast track appeared first on Chemicals and the Economy.

Biden’s Earth Day Summit puts plastics recycling on the fast track Read More

Americans hunker down on spending as the pandemic’s impact continues

US stock markets have been hitting new records recently, as investors swoon over the likelihood that the $1400 stimulus payments will power a major surge in consumer spending. But unfortunately, the facts show this is most unlikely. The chart from the New York Federal Reserve measures consumers’ intentions with regards to the 3 stimulus cheques

The post Americans hunker down on spending as the pandemic’s impact continues appeared first on Chemicals and the Economy.

Americans hunker down on spending as the pandemic’s impact continues Read More

Circular economy set to replace today’s broken global supply chains

The Great Freeze in Texas has confirmed once again the problems with today’s global supply chains.  As the New York Times has highlighted: “The pandemic has disrupted every stage of the (supply chain) journey”. The problems began last year with the disruption to the global shipping container system. Millions of containers were used to ship

The post Circular economy set to replace today’s broken global supply chains appeared first on Chemicals and the Economy.

Circular economy set to replace today’s broken global supply chains Read More

Smartphone sales highlight new trends in consumer markets

Smartphone markets continue to provide early warning of the major changes taking place in consumer markets. And Q4 data confirms the old rules are becoming less and less relevant:  As the chart shows, market positioning is now all-important. Apple are stretching their lead in the ‘sweet spot’ of the value chain – design – and

The post Smartphone sales highlight new trends in consumer markets appeared first on Chemicals and the Economy.

Smartphone sales highlight new trends in consumer markets Read More

Buyers scramble for product as global supply chains breakdown

Asian LNG prices reached $32.50/MMBTU this month, up from less than $2/MMBTU in June. The Shanghai Containerised Freight Index hit $8000/TEU container (Twenty-foot Equivalent Unit), up from prior rates of $1500/TEU. In Europe, UK supermarkets have warned of containing food shortages in N Ireland due to the new Brexit trading rules. None of this would

The post Buyers scramble for product as global supply chains breakdown appeared first on Chemicals and the Economy.

Buyers scramble for product as global supply chains breakdown Read More

US chemical companies face ‘wake-up call’ as Biden focuses on the Climate Change agenda

I worked for many years at a world-leading chemical company, ICI. But sadly, it lost its way as senior management began to focus more on financial metrics than market developments. In 2007, it disappeared. Today, other companies including the once-mighty ExxonMobil risk making similar mistakes: EM was the world’s most valuable company just 9 years ago It 

US chemical companies face ‘wake-up call’ as Biden focuses on the Climate Change agenda Read More

Plastics producers face a ‘wake-up call’ from both ends of the value chain

Plastics producers have had a great run over the past 60 years, as demand took off for their products. But now globalisation is being replaced by sustainability, and they risk being left with an out-of-date business model, and falling revenues. Upstream, refinery closures are gathering pace as electric vehicle sales accelerate Downstream, brand owners and

Plastics producers face a ‘wake-up call’ from both ends of the value chain Read More

Smartphone sales confirm mid-market of ‘affordable luxury’ is disappearing

Another 3 months, another decline in global smartphone sales. And more pressure on mid-market players like Samsung, as China’s low-cost producers continue to gain market share. As the chart shows: Samsung had 35% of the global market back in 2013, but was down to 23% in Q3 Its annualised volume fell to 262 million from

Smartphone sales confirm mid-market of ‘affordable luxury’ is disappearing Read More

If you don’t want to know the future, look away now

Next week, I will publish my annual Budget Outlook, covering the 2021-2023 period. It will highlight how the pandemic is accelerating major paradigm shifts in society, politics and the global economy. I have been publishing these Outlooks since 2007, and they disprove the idea that forecasting is a waste of time.  They highlight instead most

If you don’t want to know the future, look away now Read More

The Top 5 pandemic paradigm shifts

The Covid-19 pandemic has accelerated the fundamental changes which were already underway in global markets, as I discuss in a new interview with Will Beacham of I.C.I.S. Companies and investors need to focus on the challenges and opportunities created by 5 major paradigm shifts as we move into the New Normal. These will impact individual

The Top 5 pandemic paradigm shifts Read More

Smartphone sales head into decline as affordability becomes key

The smartphone sales decline accelerated in Q1, as Strategy Analytics report: “Global smartphone shipments fell 17% to reach 275m in Q1. This is the smartphone industry’s worst quarterly performance of all time. On an annualised basis, as the chart shows, global volume was down 12% to 1.36bn from the Q3 2017 peak. And, of course,

Smartphone sales head into decline as affordability becomes key Read More

China’s plastic ban and recycling launch marks end of ‘business as usual’ for plastics industry

Paradigm shifts start slowly at first, and it is easy to miss them. But then one day, they suddenly become obvious, and it becomes a scramble to catch up. That’s what happened on the waste plastic issue last week, when China decided to take action. As official news agency, Xinhua, reported: “The policy measures proposed

China’s plastic ban and recycling launch marks end of ‘business as usual’ for plastics industry Read More

Portugal shows the way to climate neutrality by 2050

“If you don’t know where you are going, any road will do”. The Irish proverb’s logic shows us the way forward on the greatest challenge that we face today, of achieving climate neutrality by 2050. As the President of the European Petrochemical Association, Marc Schuller, highlighted last month when issuing a ‘call to action’: “The

Portugal shows the way to climate neutrality by 2050 Read More

The next billion phone users will be buying $10 smart feature phones, not $1000 iPhones

Smartphone sales plateaued in Q3, down 9% since Q3 2017’s peak of 1.55bn, as the chart shows.  But the bigger threat from smart feature phones – now retailing for as little as $11 – continues to grow as Reliance and Vodacom launch new models in India and Africa. Smartphone sales are also seeing important shifts

The next billion phone users will be buying $10 smart feature phones, not $1000 iPhones Read More

Companies ignore the Perennials 55+ generation at their peril

Nearly a third of the the world’s High Income population are now in the Perennials 55+ generation. Yet companies mostly ignore their needs – assuming that all they want are walking sticks and sanitary pads.  Instead, they continue to focus on the relatively declining number of younger people. No wonder many companies are going bankrupt, and

Companies ignore the Perennials 55+ generation at their peril Read More

Auto markets set for major disruption as Electric Vehicle sales reach tipping point

Major disruption is starting to occur in the world’s largest manufacturing industry.  Hundreds of thousands of jobs will likely be lost in the next few years in auto manufacturing and its supply chains, as consumers move over to Electric Vehicles (EVs). As the chart from Idaho National Laboratory confirms, EVs have relatively few parts –

Auto markets set for major disruption as Electric Vehicle sales reach tipping point Read More

Smartphone sales continue their decline, whilst $25 smart feature phones open up new markets

Global smartphone sales have now been falling for 8 consecutive quarters, since Q3 2017. They are now down 9% from their peak, as the chart shows, based on Strategy Analytics data.  As always in a falling market, Winners and Losers are staring to appear: LOSERS Apple’s market share fell to its lowest level for 10

Smartphone sales continue their decline, whilst $25 smart feature phones open up new markets Read More

Smartphone sales decline begins to impact global stock markets

The bad news continues for the world’s smartphone manufacturers and their suppliers.  And President Trump’s decision to add a 25% tariff on smartphone component imports from China from June 25 is unlikely to help. Morgan Stanley estimate it will add $160 to the current US iPhone XS price of $999, whilst a state-backed Chinese consumer boycott

Smartphone sales decline begins to impact global stock markets Read More

There’s a great future for the European plastics industry in recycled plastic

Europe’s plastics industry is under major threat from the growing legislative and consumer backlash against plastic packaging. As with the global industry, its licence to operate is increasingly challenged by images of plastic rubbish polluting the world’s oceans, alongside photos of baby fish dying because their parents mistakenly fed them plastic instead of food. EU

There’s a great future for the European plastics industry in recycled plastic Read More

$60bn opportunity opens up for plastics industry as need to eliminate single-use packaging grows

150 businesses representing over 20% of the global plastic packaging market have now agreed to start building a circular economy for plastics with the Ellen MacArthur Foundation. As a first step, Coca-Cola has revealed that it produced 3MT of plastic packaging in 2017 – equivalent to 200k bottles/minute, around 20% of the 500bn PET bottles used every

$60bn opportunity opens up for plastics industry as need to eliminate single-use packaging grows Read More

IKEA heads into the circular world with furniture subscription trial

“Once upon a time, Granny and Grandad used to go to a large shop on the motorway to buy their furniture. They used to stagger around carrying Billy bookshelves and Dombas wardrobes, before treating themselves to Swedish meatballs in the canteen. And then Grandad would spend the rest of the weekend trying to assemble the

IKEA heads into the circular world with furniture subscription trial Read More

Fed’s magic money tree hopes to overcome smartphone sales downturn and global recession risk

Last November, I wrote one of my “most-read posts”, titled Global smartphone recession confirms consumer downturn. The only strange thing was that most people read it several weeks later on 3 January, after Apple announced its China sales had fallen due to the economic downturn. Why did Apple and financial markets only then discover that smartphone sales

Fed’s magic money tree hopes to overcome smartphone sales downturn and global recession risk Read More

Global smartphone recession confirms consumer downturn

Q3 smartphone sales data show the global market in recession, as Strategy Analytics confirmed: “The global smartphone market has now declined for four consecutive quarters and is effectively in a recession.” The warning signs began in Q1, when the market plateaued for the first time, as discussed here in May: “The global smartphone market has

Global smartphone recession confirms consumer downturn Read More

Trump’s auto trade war adds to US demographic and debt headwinds

President Trump’s auto trade tariffs are bad news for the US and global auto industry, as the chart highlights: It shows H1 sales in the 7 major markets, which account for 87% of global volume Sales in China have risen nearly 4x since 2007 from 3.1m to 11.8m this year Sales in the other 6 […]

The post Trump’s auto trade war adds to US demographic and debt headwinds appeared first on Chemicals & The Economy.

Trump’s auto trade war adds to US demographic and debt headwinds Read More

Plastics recycling paradigm shift will create Winners and Losers

My new analysis for iCIS Chemical Business highlights the paradigm shift now underway in the plastics industry. A paradigm shift is underway in the plastics industry as public concern mounts over the impact of plastic waste on the oceans and the environment. For 30 years, plastics producers have primarily focused upstream on securing cost-competitive feedstock supply. […]

The post Plastics recycling paradigm shift will create Winners and Losers appeared first on Chemicals & The Economy.

Plastics recycling paradigm shift will create Winners and Losers Read More

Apple, Xiaomi squeeze smartphone mid-market as sales plateau

The global smartphone market has finally gone ex-growth as China’s slowdown continues.  In turn, the market is starting to polarise – with Apple pushing further up-market whilst Chinese brands such as Xiaomi focus on volume.  Samsung’s middle market positioning looks increasingly under threat: The chart shows Q1 sales for Samsung, Apple, the 3 top Chinese […]

The post Apple, Xiaomi squeeze smartphone mid-market as sales plateau appeared first on Chemicals & The Economy.

Apple, Xiaomi squeeze smartphone mid-market as sales plateau Read More

2018 will see Winners and Losers appear in plastics markets

Two major challenges face petrochemical and polymer producers and consumers in 2018: The likely disruption created by the arrival of the ethylene/polyethylene expansions in the US The growth of the circular economy and the need to dramatically increase recycling capacity My new interview with Will Beacham, deputy editor of ICIS Chemical Business, focuses on both […]

The post 2018 will see Winners and Losers appear in plastics markets appeared first on Chemicals & The Economy.

2018 will see Winners and Losers appear in plastics markets Read More

Goodbye to “business as usual” model for plastics

Polymer markets face two major challenges in coming months. The most immediate is the arrival of the major US shale gas-based ethylene and polyethylene expansions. The longer-term, but equally critical challenge, comes from growing public concern over plastic waste, particularly in the ocean. The EU has set out its vision for a new plastics economy, where: “All plastic packaging is reusable or […]

The post Goodbye to “business as usual” model for plastics appeared first on Chemicals & The Economy.

Goodbye to “business as usual” model for plastics Read More

West’s household spending heads for decline as population ages and trade war looms

As promised last week, today’s post looks at the impact of the ageing of the BabyBoomers on the prospects for economic growth. The fact that people are living up to a third longer than in 1950 should be something to celebrate.  But as I noted in my Financial Times letter, policymakers are in denial about the importance of […]

The post West’s household spending heads for decline as population ages and trade war looms appeared first on Chemicals & The Economy.

West’s household spending heads for decline as population ages and trade war looms Read More

Global smartphone sales slide 9% in Q4, as China tumbles 16%

Global smartphone sales have seen major growth until recently as consumers fell in love with going mobile, as the chart shows: In the critical Q4 period they jumped from 290m in 2013 to 380m in 2014, 405m in 2015 and 439m in 2016 But they then fell 9% in Q4 last year, according to Strategy […]

The post Global smartphone sales slide 9% in Q4, as China tumbles 16% appeared first on Chemicals & The Economy.

Global smartphone sales slide 9% in Q4, as China tumbles 16% Read More

Older workers are looking for something more

The Financial Times has kindly printed my letter arguing that we need new policies to help people adapt to their extra decade or more life expectancy. Sir, There is another angle to Janan Ganesh’s interesting exploration of whether “Liberals risk the charge of complacency” (February 20). This is the question of why the policy elite has […]

The post Older workers are looking for something more appeared first on Chemicals & The Economy.

Older workers are looking for something more Read More

London house prices risk perfect storm as interest rates rise

2000 should have been the natural end of the BabyBoomer-led economic SuperCycle. The oldest Boomer (born in 1946) was about to leave the Wealth Creator 25 – 54 age group that drives consumer spending and hence economic growth.  And since 1970, Boomer women’s fertility rates had been below replacement level (2.1 babies/woman).  So relatively fewer young people were […]

The post London house prices risk perfect storm as interest rates rise appeared first on Chemicals & The Economy.

London house prices risk perfect storm as interest rates rise Read More

China’s lending bubble sees Beijing home prices jump 63%

Greed and fear are the primary emotions driving China’s housing and auto markets today, as China’s lending bubble hits new heights.  For ordinary citizens, greed is the key driver:    Average home prices in Beijing rose an eye-popping 63% between October 2015 – February 2017    In Shanghai, one enterprising estate agent (realtor) […]

China’s lending bubble sees Beijing home prices jump 63% Read More

UK consumers face difficult times as Brexit unwinds the housing bubble, and financial services de-cluster out of London

Brexit negotiations are likely to prove a very uncomfortable ride for UK consumers as Russell Napier of Eric, the online research platform, warned last week: □  ”Public sector debt remains at near-historic highs (in peace time!) and for the first time this public sector debt comes with a private sector bubble □  Credit card debt […]

UK consumers face difficult times as Brexit unwinds the housing bubble, and financial services de-cluster out of London Read More

America hits “peak gasoline” moment as demand patterns change

OPEC has a long wait ahead, if it hopes that US drivers will ever go back to SuperCycle levels of driving and gasoline consumption growth.  That’s the clear message from new data from the US Dept of Transport showing vehicle miles traveled last year.  The chart shows: □  Average number of miles driven per adult […]

America hits “peak gasoline” moment as demand patterns change Read More

Smartphone profits under threat as market goes ex-growth

The outlook is becoming clearer for the global smartphone market, and it confirms my judgement in November, when reviewing Q3 sales: “It seems likely that a focus on price and affordability will come to dominate. In turn, pricing pressures on suppliers will intensify. The key challenge facing the market is that it has gone ex-growth.” […]

Smartphone profits under threat as market goes ex-growth Read More

Consensus wisdom defies reality around the world

“Consensus wisdom” is a handy way of keeping up with events.  Nobody like to be the person who says “I don’t know” when the boss asks a question about something important.  But unfortunately, “consensus wisdom” is often wrong, as Ipsos MORI confirm in their new ’Perils of Perception‘ survey,  As the authors note: “It highlights how […]

Consensus wisdom defies reality around the world Read More

Midway Atoll becomes “plastic island” due to our throwaway society

Plastics have made an enormous contribution to improving our quality of life over the past 75 years.  Polyethylene (discovered in 1933), polypropylene, PVC, polystyrene, PET and many others have made our lives safer, and easier:   Plastic pipes have removed the risk of lead poisoning from our water, and helped to reduce water lost in […]

Midway Atoll becomes “plastic island” due to our throwaway society Read More

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’

Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’ Read More

Sustainability replaces globalisation as key driver for economy

2 weeks ago, India ratified the COP 21 Agreement.  This means the Agreement enters into force on 4 November, as 81 countries, responsible for more than 55% of greenhouse gas emissions, have now agreed to reduce emissions in line with the decisions made in Paris last December.  And last week saw another landmark Agreement, with 150 countries agreeing […]

Sustainability replaces globalisation as key driver for economy Read More

Political risk rises as voters feel only the populists are listening

This week, the new UK premier, Theresa May, highlighted how the central banks have encouraged the populists’ rise: “We have to acknowledge some of the bad side-effects. People with assets have got richer, people without have not.” The problem, of course, goes wider than this.  The continuing failure to recover from the 2008 Financial Crisis […]

Political risk rises as voters feel only the populists are listening Read More

Divorce, not marriage, now fueling China’s property bubble in Shenzhen

China’s housing market has always been about marriage since it began in 1998, until recently that is.  The reason, as I noted a while ago, is that: “70% of China’s women regard “housing, a stable income and some savings” as vital for any man wanting to get married.” Women have the upper hand when it […]

Divorce, not marriage, now fueling China’s property bubble in Shenzhen Read More

China’s slowdown continues as Xi “takes the pain” of reform

“What a difference a day makes“. Dinah Washington’s famous song could well be applied, with a longer timescale, to developments in China’s economy. The shape of the above chart has changed completely since it was last featured here in January 2015, as volatility has increased in China’s economy.  It shows the relationship between bank lending and […]

China’s slowdown continues as Xi “takes the pain” of reform Read More

Brexit a disaster for the UK, Europe and the world

First, the good news.  It has long been recognised that the UK economy is over-dependent on financial services, and that its housing market – particularly in London – is wildly over-priced in relation to earnings.  The Brexit vote should ensure that both these problems are solved: Many banks and financial institutions are already planning to […]

Brexit a disaster for the UK, Europe and the world Read More

Americans drive less as auto market demand patterns change

34m Americans will be driving at least 50 miles this Memorial Day weekend, which marks the start of the summer ”driving season”.  But contrary to popular belief, the average American is driving less these days. The total number of miles driven is still increasing due to the rising US population.  But on an individual basis, people are driving 6% less […]

Americans drive less as auto market demand patterns change Read More

India’s car market plateaus as motorbike sales dominate

Motorbikes continue to dominate India’s motor vehicle market, as the chart above shows based on new data from the industry association (India’s year runs from April – March): 16.5m 2-wheelers were sold in the year, up 2% versus 2014-15, and took 2/3rds of the market 2.8m passenger cars were also sold, with volume up 7%, and had a 12% […]

India’s car market plateaus as motorbike sales dominate Read More

Water wars, food shortages create urgent need for new, demand-led approach

Companies and investors need to refocus on demand as the key driver for revenue and profit growth.  Supply-driven business models are no longer sufficient. ‘How do we do this?”  is the key question, as I discuss in this short video interview with ICIS deputy news editor, Tom Brown: The key is to focus on critical […]

Water wars, food shortages create urgent need for new, demand-led approach Read More

BRIC auto sales stall as Brazil and Russia recessions worsen

Clouds are gathering over the auto industry, as the impact of the post-2008 stimulus programmes fades into history. It is hard to believe that back in 2013, only 3 years ago, analysts were confidently predicting that Russia would have become the world’s 5th largest market by 2020.  And they were similarly forecasting great things for Brazil, which […]

BRIC auto sales stall as Brazil and Russia recessions worsen Read More

US auto sales head towards price war as subprime loans rise

The warnings keep coming about the underlying health of the US auto market.  But, as with the subprime housing crisis, nobody wants to listen: Last October, the US Comptroller of the Currency warned that some activity “in auto loans reminds me of what happened in mortgage-backed securities in the run-up to the crisis“ Yet auto […]

US auto sales head towards price war as subprime loans rise Read More

Demand – the New Driver for Profit

What happens to your business, or your investments, if demand fails to return to the supply-driven Comfortable Middle Scenario forecast by consensus thinking?  This is the question raised in our new Study, Demand – the New Driver for Profit (jointly produced by International eChem and ICIS).  We suggest access to low cost feedstocks on their […]

Demand – the New Driver for Profit Read More

China’s PTA market moves to self-sufficiency and exports

Credit conditions are tightening day by day in China.  Companies with good payment records over many years are seeing their borrowing limits cut back.  2016 is indeed proving to be the year that President Xi Jinping “takes the pain of restructuring”. At the same time, self-sufficiency has become a key strategy for many industries, in […]

China’s PTA market moves to self-sufficiency and exports Read More

Auto sales slump in Japan, Brazil and Russia as China slows

China’s slowdown is continuing to reverberate around the world.  One way of measuring this is to look at auto sales in countries closely linked to China’s market such as Japan, Russia and Brazil.  As the chart shows, they did well during China’s stimulus period, but they are struggling now.  By comparison, more self-sufficient India has […]

Auto sales slump in Japan, Brazil and Russia as China slows Read More

Renault’s success with Dacia highlights changes underway in European auto markets

You never meet a shy and retiring car salesman.  They are always bursting with confidence, about to sell you a tremendous deal.  So we have to expect that the companies are always going to be confident about the future – even when it looks unpromising to everyone else.  2008 is close enough, that we can […]

Renault’s success with Dacia highlights changes underway in European auto markets Read More

Further chaos ahead for cotton and polyester markets as China aims to release its cotton stocks

Cotton has been on a roller-coaster ride over the past decade – to record high prices and then partial collapse.  This was followed by China’s decision to build the world’s largest ever cotton inventory as part of its post-2009 stimulus programme, to protect cotton farmers. This inventory, being off the market, means cotton has been […]

Further chaos ahead for cotton and polyester markets as China aims to release its cotton stocks Read More

Plastics lose market share to lightweight steel in US sutos

Plastics consumption in US autos is going down, not up.  Steelmakers and glass manufacturers have recaptured ground lost in the years to 2009, and are capturing new sales as auto standards demand lighter-weight cars.  And yet, if you had asked polymer suppliers about future demand in the US auto market a few years ago, they […]

Plastics lose market share to lightweight steel in US sutos Read More

Analyst hype over India’s ‘middle class’ repeats China mistake

Wishful thinking can have a very bad impact on company and investor profits. Look, for example, at the problems caused by the belief that China’s population had suddenly become middle class, based on average incomes of $2-$20/day.  Now it seems the same process of mythologising is underway with India, with ratings agency S&P suggesting yesterday that: “India […]

Analyst hype over India’s ‘middle class’ repeats China mistake Read More

China’s downturn means global car sales now set to plateau

Where would the global auto industry and its suppliers be without China? That’s a question to which we will probably learn the answer over the next few years, as China’s demand growth slows to more sustainable levels under its New Normal policies.  So the chart above is a useful snapshot of market developments in the […]

China’s downturn means global car sales now set to plateau Read More

UK’s ageing population causes earnings to decline

The UK economy appears to be recovering well from the financial crisis.  But appearances can be deceptive. Certainly employment has risen for both men and women since 2009, and the jobless rate has fallen.  But new data yesterday from the Office for National Statistics highlights how, despite these achievements, total incomes have been falling in real […]

UK’s ageing population causes earnings to decline Read More

Japan goes back into recession as stimulus policies fail, again

This week’s economic data from Japan confirmed, once again, that demographic changes are far more important for the economy than monetary stimulus. Japan’s premier Abe took power in 2012, promising to end the decline in Japan’s economic growth.  He appointed a new Governor for the Bank of Japan, and claimed that his “3 arrows policy” […]

Japan goes back into recession as stimulus policies fail, again Read More

China’s car market: triple shock ahead

Auto manufacturers, their suppliers and investors need to prepare themselves for a triple shock from China’s slowing economy, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog The first shock is already under way. As the chart shows, China’s slowdown has caused passenger car volumes to decline in the Bric economies – […]

China’s car market: triple shock ahead Read More

Smartphone volume peaks as 4.1bn people can’t afford internet

“Technology can save the global economy”.  That was one of the claims being made by several speakers last week at the World Economic Forum’s Industrial Council meeting in Abu Dhabi.  It was based on the concept of the Fourth Industrial Revolution – and its supporters argue that it will deliver fast-paced technological change to power […]

Smartphone volume peaks as 4.1bn people can’t afford internet Read More

China’s auto slowdown to push spare capacity into export markets

Where would the world’s auto industry, and its suppliers, have been without China in recent years?  And how will they manage now China’s demand for new cars is slowing fast?  These are the question troubling companies and investors as Q3 sales are analysed. The chart above shows the recent history of sales in the Top […]

China’s auto slowdown to push spare capacity into export markets Read More

Cash poor, time rich US consumers cause retail sales to plateau

US retail sales have failed to see the rise that most economists, and the US Federal Reserve, confidently forecast at the beginning of the year.  The theory was that lower oil prices would stimulate discretionary spending, and ensure that the long-promised economic recovery finally arrived. But September sales were up just 0.1% versus August, and […]

Cash poor, time rich US consumers cause retail sales to plateau Read More

GM says owning a car in a city “is the last thing you should do”

Something strange is happening in the European auto market, as the above chart from the industry association shows: Normally there are seasonal patterns, with March seeing the highest sales of the year But the trend of increase or decline is normally fairly stable in either direction This year, however, both March and now June have […]

GM says owning a car in a city “is the last thing you should do” Read More

84% of world population have incomes below US poverty line

One of the great myths of our time has been that vast numbers of people in the developing world have suddenly become “middle class”.  This myth seemed to grow out of a confusion between the phrase ”middle income” and “middle class”.  Every country has people who are “middle income”.   But as we discussed in Boom, Gloom […]

84% of world population have incomes below US poverty line Read More

China’s new car market goes ex-growth as used car sales take off

My latest post for the Financial Times, published on the BeyondBrics blog is below |Jun 30 17:45 By Paul Hodges of International eChem Major structural change is under way in China’s passenger car market. New car sales grew just 1.2 per cent in May, as the country develops a used car market for the first time in its history. […]

China’s new car market goes ex-growth as used car sales take off Read More

Retail markets expose the ‘middle class’ myth in emerging economies

5 years ago, the Swiss food company Nestlé forgot everything it had ever learnt about emerging markets, and suddenly decided that Africa was just about to become ‘middle class’ by Western standards. Now it is having to pay the price for its mistake, and is cutting 15% of its workforce in the equatorial Africa region. […]

Retail markets expose the ‘middle class’ myth in emerging economies Read More

10 forecasts for the New Normal world in 2020

We seem to be approaching Stage 2 of the Great Unwinding of policymaker stimulus, as the economic implications of demographic change become ever stronger. The combination of today’s ageing populations with the collapse in fertility rates means it is totally unrealistic to expect growth rates to continue at the SuperCycle levels of the past.  They were turbo-charged by […]

10 forecasts for the New Normal world in 2020 Read More

Average US auto loan term hits record 68 months in May

May was “another fantastic month for US auto sales”.  Or, it took the industry “one month closer to an inevitable downturn”.  All depends on which analyst you talk to: Ward’s Autos called May’s sales the best since July 2005 LMC Automotive suggested growth rates were slowing, and could possibly even contract next year It also depends […]

Average US auto loan term hits record 68 months in May Read More

Europe can win despite age trends

We all know that Europe has an ageing population.  Germany and Italy, for example, have median ages of 45 years.  And fertility rates have been below replacement levels for 45 years, so the relative number of higher-spending young people is reducing.  Instead, there are more and more older people, as life expectancy at age 65 […]

Europe can win despite age trends Read More

Brazilian, Russian, Japanese auto markets continue to struggle

Bill White’s important critique of the policies being followed by his former central bank colleagues echoes his warnings before the 2008 Crisis.  One of his key points is that they have focused on manipulating the value of financial assets, ratehr than on developments in the real economy: “The price of financial assets, just think of Bunds […]

Brazilian, Russian, Japanese auto markets continue to struggle Read More

India’s auto market remains dominated by motorbikes

4 years ago, India could do no wrong.  The ‘Incredible India’ campaign had captured imaginations around the world, and almost everyone seemed to believe that it was destined to become a major player in any market that it chose. Analysts were particularly excited about the potential for the auto market, with one major company suggesting: […]

India’s auto market remains dominated by motorbikes Read More

Price war hits smartphone market as China’s growth goes negative

The smartphone market has been one of the ‘jewels in the crown” of the consumer electronics market.  Yet today, it is rushing headlong into the world of the New Normal.  We can all learn a lot about the outlook for the global economy from watching its development. Until recently, the history was of astonishing growth, […]

Price war hits smartphone market as China’s growth goes negative Read More

BRIJ auto markets continue to struggle

Q1 showed little sign of improvement in the world’s second-tier auto markets – Brazil, Russia, India, Japan. In total, their sales used to equal those of the EU, the world’s 3rd largest market.  But Q1 volumes saw a 16% decline versus 2014 levels, as the chart shows: Japan’s sales were boosted in 2014 (blue column) by buying ahead […]

BRIJ auto markets continue to struggle Read More

China’s used car market set to drive future auto sales growth

China’s auto market is going through major change.  Tier 1 cities have imposed limits on car ownership, and car use by government officials is being severely restricted.  In addition, the lending bubble that drove major growth in recent years is coming to an end. Perhaps even more importantly for the medium term, a used car market is now developing […]

China’s used car market set to drive future auto sales growth Read More

IMF says world seeing “a New Reality of lower potential growth”

After 6 years of largely-wasted stimulus efforts, the world’s economic advisory bodies are finally having to accept that ageing populations really do impact economic growth. The latest International Monetary Fund’s latest World Economic Outlook finally breaks half of the taboo that has stopped most economists from accepting this seemingly common sense conclusion.  Its Summary argues as […]

IMF says world seeing “a New Reality of lower potential growth” Read More

World’s demographic dividend turns to deficit as populations age

We are living in a world of ageing populations for the first time in history.  For many, this conjures up a picture of vast numbers of old people leaning on walking sticks with one hand, and swallowing mouthfuls of pills with the other. But reality is a long way from this stereotype. LIFE EXPECTANCY HAS SUDDENLY INCREASED IN […]

World’s demographic dividend turns to deficit as populations age Read More

Americans drive less as demand patterns see major change

Americans are driving less each year.  For the first time since records began in 1970, average vehicle miles per person has been declining for over a decade.  The trend is now so well established, it is highly unlikely that the current collapse of oil prices back to normal levels will change the overall picture. This has enormous implications […]

Americans drive less as demand patterns see major change Read More

Fertility rates have collapsed in the world’s 10 largest economies

One of the great myths of our time is that the world’s population is inevitably growing.  Almost everyone has heard that the population is certain to reach 9bn by 2050, from today’s 7.3bn. Yet births in 2013 in the G7 economies (almost half of the global economy) were at the lowest level since the Great Depression year […]

Fertility rates have collapsed in the world’s 10 largest economies Read More

Apple captures smartphone profits as market shifts to services

Consumers clearly love smartphones.  The global market is growing fast with 380m sold in Q4, up 31% versus 2013.  But manufacturers might be forgiven for not being so sure. As the chart above shows, major change is underway in the market.  The concept of ‘affordable luxury’ is disappearing as the market polarises between affordability and luxury. Samsung’s market share has dived from […]

Apple captures smartphone profits as market shifts to services Read More

US housing markets weaken as home ownership levels fade

Data over the past month continues to confirm my fears that the US housing recovery is going into reverse.  The argument was summed up yesterday by S&P’s chairman, when reporting Case/Shiller housing price data for December: “The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home […]

US housing markets weaken as home ownership levels fade Read More

Vast amounts of stimulus have not made China “middle class”

Debt can’t make a country middle-class overnight.  Even a massive amount of debt can’t achieve this.  Even the largest amount of debt in history can’t do this.  China’s experience since 2007, when it increased debt four-fold, proves this. As McKinsey have reported, China increased its debt from $7tn in 2007 to $28tn by the middle of […]

Vast amounts of stimulus have not made China “middle class” Read More

54000 millionaires needed to buy new London apartments

‘Nothing succeeds like excess’.  That seems to be the motto of London property developers at the moment.  According to researchers LonRes, developers are currently building or planning the staggering total of 54000 new luxury homes in central London. These will all be offered at prices of £1m ($1.5m) and higher, according to the Financial Times.  Yet just 3900 […]

54000 millionaires needed to buy new London apartments Read More

BMW says China’s auto sales are heading into a New Normal

Its amazing what a lending bubble can do in the short-term, as the above chart shows.  It updates my August post for the Financial Times, and highlights the astonishing rise in China’s bank lending since 2008 on the x-axis, and the remarkable rise in auto sales on the y-axis. Official data shows average disposable income last […]

BMW says China’s auto sales are heading into a New Normal Read More

Falling cotton/polyester prices create ‘deflation shock’ for consumers

Cotton prices appear to be collapsing again due to the surpluses created by central bank stimulus policies since 2009.  As the chart shows, these had initially caused prices to soar to levels not seen since the American Civil War: They reached 230c/lb in March 2011, nearly double the post-1982 peak of 117c/lb in May 1995 (blue […]

Falling cotton/polyester prices create ‘deflation shock’ for consumers Read More

Chart of the Year – China’s auto sales bubble begins to burst

‘How China fooled the world’ was the subject of an excellent BBC documentary early in 2014 by senior editor, Robert Peston.  The BBC headline was as follows: “Now, Peston reveals what has actually happened inside China since the economic collapse in the west in 2008. It is a story of spending and investment on a scale never […]

Chart of the Year – China’s auto sales bubble begins to burst Read More

Sanitation is the greatest challenge facing Modi

The Financial Times has kindly printed my letter, commenting on their editorial about Premier Modi’s economic policies in India. Sir, Your editorial “India’s Modi should act more decisively in 2015” (December 24) has too limited a view of the policies required to generate growth in India’s economy. With gross domestic product per capita of about […]

Sanitation is the greatest challenge facing Modi Read More

US home ownership back at 1995 level as decline continues

  Conventional wisdom seemed to think the US housing report was positive this week.  But analysis of the data makes it hard to see why. One confusion comes from media use of the ‘seasonally adjusted’ number.  But why do we need an adjustment, when we have data going back to 1959?  It simply creates more potential for error.  […]

US home ownership back at 1995 level as decline continues Read More

70% of China’s auto dealers unprofitable, as lending curbs bite

Would anybody have believed these charts, if one had presented them as a forecast for auto sales a few years ago?  Clearly not: Everyone knew that Europe was one of the world’s top 2 markets, and China was very small Europe’s average incomes were around $40k, whereas China’s were less than $5k even in the […]

70% of China’s auto dealers unprofitable, as lending curbs bite Read More

US housing fraud rises as first-time buyers priced out of market

Signs of stress seem to be appearing in the US housing market once more.  Thus the Wall Street Journal reports: “An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more..Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery […]

US housing fraud rises as first-time buyers priced out of market Read More

UK grocery sales fall for first time since records began

Next Friday sees the start of the main shopping period in the US – ‘Black Friday’, the day after Thanksgiving.  But increasingly, consumers are giving the stores a miss.  Or even worse (from the retailers’ viewpoint) only visiting to check out products before buying them online. Thus Wal-Mart, the largest US chain, is now having to extend its Black Friday […]

UK grocery sales fall for first time since records began Read More

Affordability the key driver for New Normal success

Change is always unwelcome and usually uncomfortable.  But it also provides us with Opportunity, as the Chinese character for Crisis highlights. The second half of our Boom, Gloom and the New Normal eBook provides detailed discussion of the Opportunity for product development, research and development, and manufacturing in the New Normal.  We also summarised the key features of the New Normal in […]

Affordability the key driver for New Normal success Read More

US jobs data confirms long-term decline in participation rate

Many people, including former US Federal Reserve Chairman Paul Volcker, have questioned whether it is really possible for the US Federal Reserve to use monetary policy to boost employment. What can the Fed do to ensure people get the high school diplomas they need for employment today?  What can it do to provide more jobs for Blacks […]

US jobs data confirms long-term decline in participation rate Read More

China’s smartphones outsell Samsung & Apple combined in Q3

The picture on the right is the Xiaomi Mi4 smartphone. The 16GB version sells in China at Rmb 1999 ($326), and the 64GB version at Rmb 2499.  By comparison, Apple’s iPhone 6 sells for Rmb 5288. Unsurprisingly, Xiaomi is moving up the world sales league very fast.  In Q2, it jumped to 5.1% market share, from just 1.8% in Q2 […]

China’s smartphones outsell Samsung & Apple combined in Q3 Read More

Shell CEO says Europe needs to leverage chemicals clusters

There are 2 ways to improve operating rates in an industry.  One is to increase volumes, the other is to reduce capacity.   The latest APPE data covering H1 2014 for European olefin capacity highlights how the European petrochemical industry has successfully used both mechanisms over the past year to improve its position: Ethylene volume increased to 9.8MT, versus […]

Shell CEO says Europe needs to leverage chemicals clusters Read More

Indian Oil join campaign to build toilets in India

The blog is delighted to be able to congratulate Indian Oil (IOC) on becoming the first company to commit to building toilets in India.  In response to Premier Modi’s appeal, the chairman of India’s bggest refiner, B. Ashok, last week personally began to build toilets at a school near its refinery in Mathura in Uttar Pradesh state. IOC have […]

Indian Oil join campaign to build toilets in India Read More

Subprime loans drive US auto sales growth

Major problems are developing in the US auto market.   The critical issue is that companies have been adding capacity since 2009 on the basis that demand would return to SuperCycle levels.  But it hasn’t. The result is that the mass market has become more and more competitive.  Only sales into the high margin luxury/pickup segments are actually […]

Subprime loans drive US auto sales growth Read More

Ageing consumers from Chile to China need affordable, quality goods and services

The New Old 55+ generation is the key demographic for future consumer spending.  Their numbers are rising rapidly as global life expectancy has risen by 50% since 1950. Over the same period, global fertility rates have halved.  So there will be fewer younger people joining the wealth-creator generation of 25 – 54 year-olds that has historically driven economic […]

Ageing consumers from Chile to China need affordable, quality goods and services Read More

Russian downturn causes GM, Ford U-turn; EU slows despite discounts

August is a holiday month for Europe’s statisticians.  So we had to wait until yesterday for a combined summary of July and August’s EU auto sales.  As the chart shows, they indicate a new slowdown is underway after the more encouraging volumes at the start of the year: Sales were up only 5.6% in July and 2.1% in August (red square), […]

Russian downturn causes GM, Ford U-turn; EU slows despite discounts Read More

US PVC exports tumble as demand weakens in key markets

The US PVC industry is hitting new problems, to add to the post-2006 collapse of the US housing market. Yet only 10 years ago, it was riding high.  Demand into housing (the main outlet) was at record levels thanks to subprime lending, and PVC production had just hit a record 7.3 million tonnes. Even after the financial Crisis, global […]

US PVC exports tumble as demand weakens in key markets Read More

US reaches ‘peak car’ moment as incentives, inventories rise, whilst fewer Americans carry driving licenses

The blog’s suggestion back in March that now would be a good time for US readers to buy a new car is looking more and more prescient.  As the head of American Honda explained to investors last month: “In addition to a heavy reliance on fleet sales to boost volumes, we are seeing some of our […]

US reaches ‘peak car’ moment as incentives, inventories rise, whilst fewer Americans carry driving licenses Read More

China Transformation webinar tomorrow

Today is Mid-Autumn Festival day in China, held to celebrate the harvest.  Traditionally it features the exchange of moon cakes filled with lotus paste and egg yolks, whilst children go to lantern parades. But in recent years, it has also become synonymous with corruption.   Silver moon cakes, as pictured above, became a common gift for […]

China Transformation webinar tomorrow Read More

August highlights

Many readers have been taking a well-earned break over the past few weeks.   As usual, therefore, the blog is highlighting key posts during August, to help you catch up as you return to the office. Economic outlook:  Great Unwinding of stimulus underway.  Q2 results show slowing growth.  US retail sales decline in line with incomes, […]

August highlights Read More

US, Japan consumer spend falls, deflation threatens Eurozone

We are now two-thirds of the way through 2014, and critical decisions are looming for companies and investors.  Do they give central banks one more chance to stimulate growth?  And are they prepared to trust policymakers to avoid a major geopolitical crisis in the Ukraine? Or do they decide that ‘enough is enough’, and that […]

US, Japan consumer spend falls, deflation threatens Eurozone Read More

Auto sales on roller-coaster ride in Japan, Russia, Brazil, India

Car sales in Japan, Russia, Brazil and India currently account for just under 1 in 5 of global sales.  Their market share peaked at 21% in 2008, but is today back at 2005′s level of 17%.  As the chart shows, it has been a roller-coaster ride for all of them: Japan’s 4.7m sales were 10% of the global total […]

Auto sales on roller-coaster ride in Japan, Russia, Brazil, India Read More

Unilever says Q2 market growth slows in emerging countries, developed countries weak

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 […]

Unilever says Q2 market growth slows in emerging countries, developed countries weak Read More

US retail sales hit by declines in income and household wealth

US retail sales tell a sorry story about the state of underlying demand.  US sales at Wal-Mart, the world’s largest store chain, have failed to grow for 6 consecutive quarters, with shopper traffic falling 1.1% in Q2.  The company’s explanation for the problems is worth pondering by anyone in business: It is facing intense competition […]

US retail sales hit by declines in income and household wealth Read More

China’s waning stimulus spells trouble for the world’s biggest car market

The blog’s latest post for the Financial Times, published on the BeyondBrics blog is below. By Paul Hodges of International eChem China’s July lending level of just Rmb 385bn ($62.6bn) has surprised financial markets, which were expecting an increase in stimulus. But bigger surprises may lie ahead. The strong link between lending and passenger car sales […]

China’s waning stimulus spells trouble for the world’s biggest car market Read More

China’s low-cost smartphones start to dominate global market

China’s exports are growing again.  But not because SuperCycle levels of demand have returned in the West. Instead, its companies are using their low-cost manufacturing model to take on and beat Asian and Western giants.  Developments in the global smartphone market highlight the rapidity of the change underway They confirm China’s economy is moving in exactly the […]

China’s low-cost smartphones start to dominate global market Read More

GM focuses on low-cost autos, as European sales remain weak

Low growth and low-cost have become the dominant features of Europe’s auto market. Europe’s modest rise in auto sales continued in June, with volumes up 4.5% versus 2013.  But as the auto association reminds us, this “is the second lowest level in the month of June since reporting began in 2003“.  And the detail of the […]

GM focuses on low-cost autos, as European sales remain weak Read More

US auto sales set to decline as today’s credit bubble ends

Its really not difficult to forecast US auto sales and housing starts if you take a longer term view.  Of course, this wouldn’t suit the traders, who love the “surprise” of a monthly number being higher or lower than the previous month.  But why does everyone else put up with this nonsense? The chart above demonstrates the […]

US auto sales set to decline as today’s credit bubble ends Read More