The Chemicals Industry is expected to see better times, according to S&P Global Ratings. The global macro narrative indicates resilient services and stubborn inflation, with labor markets remaining tight, even in regions where output has stalled. Trade is flat, meaning domestic-driven economies are outperforming, especially Emerging Markets. Overall inflation is rising, good for households, but core inflation is stickier, bad for central banks. Policy rates need to stay elevated, constraining downward rate probability in many markets. Markets have fully bought the "higher" but not yet the "longer" part of the narrative. The big three macro narrative includes the US, the Eurozone, and China, with the US experiencing an disappointing post-COVID rebound demand outstripping supply, struggling property sector, geopolitical risks to frontiers, and a novel "exorbitant privilege" with services materializing as forecasted out of recession, and consumers holding their own growth. Demand is resilient, still. Housing activity appears to be reviving, and arms are measured and targeted so far. The forecast growth is down 5% this year, with a downward leg likely with the limited supply. Overall, the outlook for the Chemicals Industry is positive, but there are risks to consider.
