The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), rose 2.7% in July on a three-month moving average basis following a 0.1% gain in June. On a year-over-year basis, the barometer fell 8.9% in July.
The unadjusted data show a 1.3% gain in July following a 3.4% gain in June and a 3.6% gain in May. The diffusion index rose to 41% (which marks the number of positive contributors relative to the total number of indicators monitored). The CAB reading for June was revised upward by 1.36 points and the May reading was revised upward by 1.40 points.
“With three consecutive months of gains, the latest CAB reading is consistent with recovery in the U.S. economy,” said Kevin Swift, chief economist at ACC.
The CAB has four main components, each consisting of a variety of indicators:
- equity prices;
- product prices; and
- inventories and other indicators.
Production-related indicators were mixed in July. Despite improvement in new home sales, housing starts and building permits, trends in construction-related resins, pigments and related performance chemistry were soft. Reflecting a recovery in light vehicles and other industries, resins and chemistry used in durable goods were mixed. Plastic resins used in packaging and for consumer and institutional applications were mixed. Performance chemistry strengthened, while U.S. exports were mixed. Equity prices gained, and product and input prices strengthened. Inventory and other supply chain indicators turned positive.
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Source: American Chemistry Council