May 2019

Chemical Activity Barometer up slightly in May and for the year

The Chemical Activity Barometer (CAB) rose 0.4% in May on a three-month moving average (3MMA), the third monthly gain after several weak months, according to the American Chemistry Council (ACC). On a year-over-year basis, the barometer is up 0.5%. The CAB consists of indicators in production, equity prices, product prices and inventories and other indicators.

“Year-earlier comparisons have turned positive in recent months, and while trade tensions, slowing economic growth overseas, and soft economic reports in the U.S. have created uncertainty that has weighed on business investment, the CAB signals gains in U.S. commercial and industrial activity through mid-2019, albeit at a moderate pace,” said Kevin Swift, chief economist at ACC. “There is some possibility of improving activity in the closing months of the year.”

Production-related indicators in May were slightly positive. Trends in construction-related resins, pigments and related performance chemistry were mixed and suggest further slow gains in housing activity. Plastic resins used in packaging were positive, while those for consumer and institutional applications were mixed. Performance chemistry and U.S. exports were mixed. Equity prices dropped sharply this month, while product and input prices rose. Inventory and other indicators were positive.