We have been using this data for near a year now and it has been the most accurate thing I have found when it comes to global conditions…
Dow Chemical reported yesterday. They had a great quarter, a record quarter. That is not the metric though. We need a more ground level look at what is happening. See, Dow operates at all levels of industry globally. From basic and specialty chemicals they make the products that are used to make just about everything. Add in their water, agriculture and hydrocarbon businesses and you have just about every manufacturing process and basic human need covered.
With all that being said, there are two chart from Dow’s earnings releases (they continually update these) that go directly to the global economy.
Here Dow documents its demand from Q1 2009 to Q1 2010 in every region and sector:
Here Dow documents is operating rates:
The trend is undeniable and strengthening. As Dow’s operating rates increase this mean that global demand from all sectors is increasing. Certainly some areas/sectors are out pacing others and that is good, it tells us there is more growth still to be had.
Now is this a “forever” look into the future? Of course not. But, since much of Dow’s demand, especially in the basics business is based on upcoming production from manufacturers, is does mean that the next couple quarters at least look good.
Just keep this in the back of your mind when the hysteria over Greece or Portugal causes a market sell off.