US CAB Index Rise In April

Chemical Activity Barometer Increases 0.5%

The U.S. Chemical Activity Barometer, or CAB, recorded a 0.5 percent increase in April, according to the latest figures from the American Chemistry Council.
“The latest CAB signals gains in U.S. commercial and industrial activity through mid-2019, but at a slow pace,” said Kevin Swift, chief economist at ACC. “As a result, the recovery and expansion underway is likely to surpass the record of 120 months set during the 1990s. The CAB reading suggests that there are glimmers of hope for improving activity in the closing months of the year.”

Based on four main components of production; equity prices; product prices; and inventories and other indicators, the CAB index is a signal for breakbulk demand in the industry. The ACC notes that applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research.

U.S. CPRI Falls for March

Despite the positive results from the CAB, the wider picture for industry activity was less certain as the ACC also reported that the Chemical Production Regional Index fell by 0.4 percent in March.
The index, which tracks chemical production activity in seven U.S. regions, dropped for the second month in a row, following a revised 0.3 percent decline in February and a 0.1 percent gain in January.
“Compared with March 2018, U.S. chemical production was up by 3.1 percent on a year-over-year basis,” the ACC notes however, adding that “Chemical production was higher than a year ago in all regions, with the largest gains in the Gulf Coast region, reflecting gains in the output at new shale-advantaged chemical plants.”

Northeast and West Coast Higher

“During March, chemical output was higher in the Northeast and West Coast regions, but fell in the Gulf Coast, Midwest, Ohio Valley and Southeast regions. Output in the Mid-Atlantic region was flat,” the ACC said in a statement.

Based on information from the Federal Reserve, the U.S. CPRI is measured using a three-month moving average to smooth month-to-month fluctuations.

An independent industry association, the ACC represents a diverse set of companies engaged in the business of chemistry using best-in-class member engagement, political advocacy, communications and scientific research.