Oct 29 | 2020
(Americas) Chemical Activity Index Softens
Recovery in the U.S. chemicals industry has slowed in October, showing "a marked deceleration” compared to September, according to the American Chemistry Council.
The ACC’s Chemical Activity Barometer, or CAB, index, increased by just 0.9 percent in October on a three-month moving average basis as compared to 1.5 percent in September. Despite this slowdown the ACC remains positive on longer term trends.
“With six consecutive months of gains, the October CAB reading remains consistent with recovery in the U.S. economy,” said Kevin Swift, chief economist at ACC.
Unadjusted data showed a 0.1 percent gain in October following a 0.8 percent gain in September and a 1.9 percent gain in August.
“Resins and chemistry used in light vehicles and other durable goods were positive. Gains in plastic resins used in packaging and for consumer and institutional applications were mixed,” an ACC spokesperson said.
The ACC notes that the CAB index consistently precedes the U.S. economy’s business cycle with a lead of two to 14 months, and an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research.
Positive Indicators Diminish
Overall the number of positive contributors relative to the total number of indicators also slid in October as ACC’s diffusion index eased from 65 percent to 59 percent.
“Gains in plastic resins used in packaging and for consumer and institutional applications were mixed. Performance chemistry and U.S. exports were mixed,” the ACC stated.
Indicators covered by the tool include: production of chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals; chemical company stock data; hours worked in chemicals; publicly-sourced chemical price information; industry sales-to-inventories; and several broader leading economic measures.
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