The purchasing managers index (PMI) increased by 1.0 point to 53.4 in March, but the chemicals industry was one of two industrial segments reporting contraction, according to data from the Institute for Supply Management (ISM) that was discussed in the latest Weekly Chemistry and Economic Report from the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com). The PMI is a diffusion index, where readings above 50 indicate economic growth.
The contracting PMI numbers for chemistry are contradicted by data for chemical railcar loadings in March and by hours worked in the chemical industry. The gain in hours worked suggest a gain in production, ACC says, but “it appears that the 4th-quarter destocking was mild and possibly ending.” In addition, producers’ inventories of chemicals remain balanced.
Within the PMI for the chemical sector, producers reported that their suppliers deliveries were faster in March, the ACC report notes, and that their customers’ and their own inventories were low.
“Chemical producers assert they are facing higher prices on average,” the ACC report says. “They are seeing growth in new export orders and a decline in imports.”
The growing overall PMI showed a slipping new-orders component and an increasing production component.
Assessing the week’s economic data, ACC proclaimed them mixed, with a lower-than-expected increase in non-farm payrolls in the employment report, slipping construction spending, but residential construction spending and light vehicle sales holding steady.