Recession effect on chemical company

Recession effect on chemical company

The chemical industry has made a great progress and achieved many achievements. In fact, the chemical industry has a great influence in many industries from the production of daily necessities such as raincoats, plastic slippers to materials used for the energy industry, rockets ... It is easy to see that the chemical industry are very important, in high demand. But the recession still affects many chemical companies in our country.

The chemical industry downturn affecting the chemical industry is understood in different ways depending on the views of different schools:

In macroeconomics: “A chemical industry recession is a decline in the chemical production of a country, or negative growth for two or more consecutive quarters in a year”.

Global influence on the chemical industry

The severe and long-lasting degradation is known as the chemical crisis. The devastating breakup of the chemical industry is called the collapse of the bubble burst in the chemical industry suffered by chemical companies. The decline of chemicals in many countries at the same time led to chemical degradation. world. Although the recession Vietnam did not affect much.

Some characteristics of the chemical industry recession:

• Consumption fell sharply, inventories of durable goods in businesses increased unexpectedly. This leads to manufacturers cutting production, leading to a decrease in investment in equipment and factories, and as a result, actual production of chemicals decreases.
• The demand for labor decreased, first the number of working days decreased, followed by the reduction of workers and the high unemployment rate.
• When output decreases, inflation will slow down because input prices of chemical production fall due to weak demand. Service prices are difficult to reduce, but they also do not increase rapidly during the economic downturn.
• Corporate profits plummet, and stock prices often fall as investors sense the downward phase of the business cycle. The demand for capital also decreases, causing interest rates to fall during recessions.

Thus, the impact of the recession on the world chemical industry affects many foreign chemical companies as well as in Vietnam. The adjustment of prices and state policies will support enterprises in production and export, promote the consumption of goods, and improve production quality.