Of the strong growth regions around the world, the US and China are appearing to slow, with US growth forecasts now trending below 2% amongst the region's analysts. For the first time since June 2009 US PMI is below 50% at 49.7%, ending a 34 month run in positive territory.
This news is certainly not good, but it is much better than early 2009 when figures were in the 33-44% range. Hold your breath for the July figure, although, with US housing prices starting to pick up, there are indications that consumer confidence and personal balance sheets may be recovering at last.
After the Arab Spring price hikes and associated speculation, the Oil price is finally falling. According to the Indian government’s Petroleum minister, a $10 rise has a 1.5% negative effect on global GDP, a trend reiterated by keynote speakers at the recent EU-OPEC Energy Dialogue. So the recent falls in Brent crude from $122 to $100/barrel should provide a much needed 3% stimulus around the world. Again, there is light at the end of the tunnel.
The biggest issues yet to work through are the impact of fracking on the global oil price and the US-Middle East balance. Combined with the potential output from oil sands, some forecasters are suggesting the US could become self sufficient in energy again; a situation not seen since the peak production in the 1970s - a point highlighted in a separate OPEC seminar in Europe earlier in June. Could this lead to a resurgent US while Europe remains in a stall?
Meanwhile in the lubricants market, the UEIL is continuing to find lubes businesses that are “not playing by the rules”. The UEIL Competition committee has already handled as many cases in the first six months of 2012 as it did in the whole of 2011. Maintaining a level playing field, ensuring efficient information flow and distribution of specifications is an essential part of a freely competitive market – and of course one that is close to OATS heart . Globally this remains an issue. We are all fortunate that UEIL is doing such a good job. “The price of freedom is eternal vigilance”.
On the technology front, the acceleration of the tablet market - which is predicted to grow five-fold globally by 2017 - is providing yet another facet of change in lubricants marketing. Diversity of device shapes and sizes means that internet solutions need to be built with agility and flexibility in mind: apps may at last have found some competition. Of course, OATS is working on that too.
If you would like to find out more about our marketing solutions or have any views on this, or any other, content in this month’s OATS Bulletin, please contact us.
Sebastian Crawshaw
Chairman, OATS