Looking at the massive drop in international trade over such a short period, I draw on my recent travels around the world. Businesses have been going “gangbusters” for many years and what we might be seeing is the result of that in regard to stock and supply line levels. Scared not to miss the opportunity of sales, many businesses became a little careless in their control of these two features. Then, total market turmoil, they all turned off the taps, so what we are still seeing is the destocking process from first tier to second to third tier supplies etc – 20% doesn’t surprise me when I have visited recently factories using as low as 10% of their production line capacity. I doubt that the volumes will be back up to former levels quickly as the new manufacturing will restart for the new market levels and a more subdued stock pipeline possibly starting May ’09.
On the lighter side: What is the blood group of a pessimist? Answer: b-negative!