The Chemical Activity Barometer (CAB), a leading economic indicator developed by the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com), ended the year on a strong note, posting a monthly gain of 0.3% and a year-over-year gain of 4.4%. This represents a significant improvement over the first half of the year, and a pace not seen since September 2010, ACC said in its latest Weekly Chemistry and Economic Report. In summary, the CAB continues to signal further gains in U.S. business activity well into the second quarter 2017, the ACC report says.
All data are measured on a three-month-moving-average basis. The CAB has four primary components, each consisting of a variety of indicators: production; equity prices; product prices; and inventories and other indicators. In December all of the four core categories for the CAB improved. Production-related indicators were positive. Overall trends in construction-related resins, pigments, and related performance chemistry were positive and suggest further gains in housing next year. Other indicators, including equity prices, product prices, and inventories, were also positive. The diffusion index was stable at 65%.
The ACC report also included data on U.S. specialty chemicals market volumes, which rose 0.4% in November. This follows a revised 0.1% gain in October and a 0.2% gain in September. Volumes have generally been moving up since May. All changes in the data are reported on a three-month moving average basis. Of the 28 specialty chemical segments we monitor, 21 expanded in November, up from 15 expanding in October. Seven markets experienced decline. During November, large gains (1.0% and over) were only in cosmetic chemicals, mining chemicals, oilfield chemicals, and specialties. Smaller monthly gains occurred in market volumes for adhesives & sealants, biocides, construction chemicals, dyes, flame retardants, flavors & fragrances, food additives, foundry chemicals, industrial & institutional cleaners, lubricant additives, paint additives, paper additives, plastic compounding, and printing ink.
Also, the U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.2% in November, following flat growth in October and a 0.2% decline in September, the ACC report says. In November, chemical production rose across all regions, with the highest gain in the Ohio Valley region. Chemical production was mixed over the same three-month period. There were gains in the production three-month moving average output trend of fertilizers, consumer products, plastic resins, other specialties, industrial gases, chlor-alkali, and other inorganic chemicals. These gains were partially offset by declines in the production of organic chemicals, pharmaceuticals, synthetic rubber, pesticides, coatings, adhesives, and manufactured fibers.