American Chemical Activity Barometer

American Chemical Activity Barometer

The leading economic indicator of American Chemical Activities increased in September 2012 by 0.3 % to 89.9 points against August, suggesting a sub-par growth into 2013

The American Chemistry Council (ACC) released its monthly Chemical Activity Barometer (CAB) and is deriving from a composite index of chemical industry activities in America. The small advancement represents the third consecutive monthly increase and follows small upward revisions for the previous three months.

DC80485-INFODC80485-INFODr. Kevin Swift, chief economist of the ACC commented: “Interestingly, we are seeing this year’s economy repeat the pattern of 2010 and 2011 and we compared this situation to the old Charlie Brown comic strip where Lucy holds the football for Charlie but at the last moment as he goes to kick it, she removes it!” In other words, just as the first quarter discussion about economic recovery is finally gaining traction, the proverbial football – the recovery – disappears.

The chemical industry’s early position in the supply chain uniquely positions the CAB against other economic indicators. The CAB provides a long lead for business cycle peaks and dells and can help identify emerging trends in the wider U.S. economy within sectors closely linked to the business of chemistry such as housing, retail and automobiles. Applying the AB back to 1947, it has been shown to lead the National Bureau of Economic Research (NBER) by two to 14 months, with an average lead of eight months. NBER is the organisation providing the official start and end dates for recessions in the U.S.

The results were mixed trends in some areas of September CAB data, with production related indicators mostly positive, such as further gains in the construction related plastic resins, coatings, pigments and other chemistry, suggesting the housing market recovery continues, as reflected in last week’s announcement about housing starting to rise 2.3 % in August. Other components were less positive with product and input prices stable and U.S. exports continuing to slow.

The chemistry industry is one of the largest industries in the United States, generating USD 760 billion. The manufacturing sector is the largest consumer of chemical products and 96 % of manufactured goods are touched by chemistry.

www.americanchemistry.com


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