WASHINGTON, Jan. 27, 2015 /PRNewswire/ -- The Chemical
Activity Barometer (CAB), a leading economic indicator created by
the American Chemistry Council (ACC), increased 0.2 percent this
month, following a 0.1 percent slide in December, as measured on a
three-month moving average (3MMA). Accounting for adjustments, the
CAB remains up 3.6 percent over this time last year.
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. January's components were mixed: production and equity
prices were up, product prices were down and inventories continued
to improve.
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*
|
|
Jan-14
|
Aug-14
|
Sep-14
|
Oct-14
|
Nov-14
|
Dec-14
|
Jan-15
|
|
|
|
|
|
|
|
|
|
|
CAB (3
MMA)
|
94.4
|
97.1
|
97.3
|
97.2
|
97.6
|
97.5
|
97.7
|
|
% M/M
|
|
0.3
|
0.2
|
0.2
|
-0.1
|
0.4
|
-0.1
|
0.2
|
|
% Y/Y
|
|
2.9
|
4.2
|
4.1
|
3.8
|
4.0
|
3.7
|
3.6
|
|
|
|
|
|
|
|
|
|
|
CAB
|
|
94.7
|
97.2
|
97.6
|
97.5
|
97.7
|
97.4
|
97.3
|
|
% M/M
|
|
0.4
|
-0.1
|
0.4
|
-0.1
|
0.2
|
-0.4
|
-0.1
|
|
% Y/Y
|
|
2.4
|
4.0
|
4.0
|
4.1
|
3.8
|
3.2
|
2.7
|
*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:
24 February 2015
9:00 a.m. Eastern Time
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SOURCE American Chemistry Council