WASHINGTON, July 22, 2014 /PRNewswire/ -- The Chemical
Activity Barometer (CAB), a leading economic indicator created by
the American Chemistry Council (ACC) posted a 0.4 percent increase
over June, as measured on a three-month moving average (3MMA). The
pace of growth was consistent with earlier growth logged in the
second quarter. Year over year growth now stands at a 4.4 percent
increase. Uncertainty in global energy markets kept the
non-adjusted barometer at a slow 0.1 percent gain in June, but
provisional data suggest there is room for further expansion in
coming months.
The Chemical Activity Barometer has four primary components,
each consisting of a variety of indicators: 1) production; 2)
equity prices; 3) product prices; and 4) inventories and other
indicators.
During July production-related indicators were up, as were
product/selling prices, and inventories. After rebounding sharply
in May, chemical equity prices have weakened in response to the
growing unrest in the Middle East
and Ukraine.
Unlike earlier readings, trends in construction-related
chemistries suggest a lackluster market for this sector, which
includes plastic resins as well as adhesives and sealants,
construction chemicals, paint additives, and other performance
chemistries. Pigments are faring better, as are plastic resins used
in consumer product applications. Continued strength in electronic
chemicals is encouraging, as the semiconductor industry's early
place in the supply chain makes it a bellwether of the industrial
cycle. Gains in oilfield chemicals suggest that the boom in
unconventional oil and gas will continue to progress, contributing
to the overall growth of the U.S. economy.
The Chemical Activity Barometer is a leading economic indicator
derived from a composite index of chemical industry activity. The
chemical industry has been found to consistently lead the U.S.
economy's business cycle given its early position in the supply
chain, and this barometer can be used to determine turning points
and likely trends in the wider economy. Month-to-month movements
can be volatile so a three-month moving average of the barometer is
provided. This provides a more consistent and illustrative picture
of national economic trends.
Applying the CAB back to 1919, it has been shown to provide a
longer lead (or perform better) than the National Bureau of
Economic Research, by two to 14 months, with an average lead of
eight months at cycle peaks. The median lead was also eight months.
At business cycle troughs, the CAB leads by one to seven months,
with an average lead of four months. The median lead was three
months. The CAB is rebased to the average lead (in months) of an
average 100 in the base year (the year 2007 was used) of a
reference time series. The latter is the Federal Reserve's
Industrial Production Index.
Chemical Activity Barometer for the Latest Six Months and
Year-Ago
Month*
|
|
Jul-14
|
Feb-14
|
Mar-14
|
Apr-14
|
May-14
|
Jun-14
|
Jul-14
|
|
|
|
|
|
|
|
|
|
CAB
|
|
93.0
|
94.9
|
95.6
|
96.1
|
96.8
|
96.9
|
97.2
|
% M/M
|
|
0.1
|
0.3
|
0.7
|
0.5
|
0.7
|
0.1
|
0.4
|
% Y/Y
|
|
3.8
|
2.7
|
3.9
|
4.1
|
4.3
|
4.3
|
4.6
|
|
|
|
|
|
|
|
|
|
CAB (3
MMA)
|
92.9
|
94.6
|
95.1
|
95.6
|
96.2
|
96.6
|
97.0
|
% M/M
|
|
0.2
|
0.3
|
0.5
|
0.5
|
0.7
|
0.4
|
0.4
|
% Y/Y
|
|
4.0
|
2.6
|
3.0
|
3.6
|
4.1
|
4.2
|
4.4
|
*Percentage changes may not reflect index values due to
rounding.
The CAB comprises indicators relating to the 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; end-use (or customer) industry sales-to-inventories;
and several broader leading economic measures (building permits and
new orders). Each month, ACC provides a barometer number, which
reflects activity data for the current month, as well as a
three-month moving average. The CAB was developed by the economics
department at the American Chemistry
Council.
The next CAB is currently planned for:
26 August 2014
9:00 a.m. Eastern Time
The CAB is designed and prepared in compliance with ACC's
Antitrust Guidelines and FTC Safe Harbor Guidelines; does not use
company-specific price information as input data; and data is
aggregated such that company-specific and product-specific data
cannot be determined.
Note: Every effort has been made in the preparation of this
publication to provide the best available information. However,
neither the American Chemistry Council, nor any of its employees,
agents or other assigns makes any warranty, expressed or implied,
or assumes any liability or responsibility for any use, or the
results of such use, of any information or data disclosed in this
material.
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SOURCE American Chemistry Council