As China's economic revival shows signs of stalling, economists from major institutions, including Goldman Sachs, HSBC, Citi, and Nomura, have revised their GDP growth forecasts lower for 2023, causing uncertainty for globally linked earnings prospects.
This week, Lanxess joined Croda, K+S and Victrex in preparing investors for the impact of weak demand, tougher pricing, or destocking by customersWhether the worsening outlook for chemicals is a warning for the broader industrial or cyclical complex isn’t yet clear Industrial shares are usually closely correlated with chemicals and account for nearly 14% of the Stoxx 600, the largest sector weight in the European benchmark after health care. More broadly, economically driven cyclicals are about two-thirds of the market. Their earnings prospects are heavily linked to global growth, which has been driven by China for the past few years. But the Asian giant’s revival is faltering.