The Standard & Poors Chemicals Index was up 19.1% from the beginning of 2010, compared to 12.9% growth in the S&P 500 Index, reports the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com). In December 2010 alone, the S&P index for chemical companies rose by 8.1%, compared to a 6.6% rise in the overall S&P 500 Index over the same time, ACC says in its most recent Weekly Chemistry and Economic Trends report.
“Equity prices are often a good indicator of future activity and represent one component of the leading economic indicators,” ACC said in the report.
ACC also cited other economic data in the report, including information from the Institute for Supply Management (ISM). ISM data indicate that manufacturing activity expanded for the 17th consecutive month in December, and the rate of expansion accelerated slightly. The chemical industry was among those sectors showing growth, according to the ISM data. “Chemical company inventories trended higher, but customer inventories were reported as too low,” commented ACC.
The ACC reports positive overall news for the wider economy, including data indicating that the economy experienced the most active Christmas shopping season in several years. Despite mixed employment numbers, ACC remarked that “it appears that we are entering a new phase of the recovery, one that is more sustainable in which a virtuous cycle of job creation, consumer spending, sales, production and hiring is in place.”
The unemployment rate fell by 0.4%, ACC says, while non-farm payrolls gained an “anemic” 104,000 jobs. Most of the improvement of the unemployment rate could be attributed to people leaving the workforce, the ACC report notes.