January 2019

Chemical barometer gives hints of slower growth in U.S.

The American Chemistry Council (ACC) posted a 0.3% decline in January on a three-month moving average (3MMA) basis according to its Chemical Activity Barometer (CAB). This is the third consecutive month-over-month drop and suggests a slower rate of U.S. economic growth, ACC said. The barometer is up 0.8% (3MMA) on a year-over-year (Y/Y) basis, a slowdown in the pace of growth compared to last year. 

The unadjusted measure of the CAB was flat (0.0%) in January and declined 0.2% in December and 0.8% in November.

ACC’s Chemical Activity Barometer consists of indicators for production, equity prices, product prices and inventories and other indicators. Major components of the barometer were mixed in January, ACC said. Trends in construction-related resins, pigments and related performance chemistry were mixed, suggesting slow housing activity. Plastic resins used in packaging and in consumer and institutional applications turned positive, performance chemistry gained, and U.S. exports were mixed. Equity prices retreated sharply again this month, and product and input prices fell as well. Inventory indicators were positive.

The diffusion index was stable at 53%. This index marks the number of positive contributors relative to the total number of indicators monitored, ACC noted.

“The CAB continues to signal gains in U.S. commercial and industrial activity through mid-2019, but at a much slower pace as growth (as measured by year-earlier comparisons) has turned over,” said Kevin Swift, Chief Economist at ACC. “Despite three straight months of decline in the barometer, the cumulative decline is 1.0%– well below the 3.0% that would signal negative growth in the U.S. economy.”

For the full data set, visit https://www.americanchemistry.com/CAB-vs-Industrial-Production/