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ACC economic indicator survey forecasts continued US growth

2:09 PM MDT | June 28, 2013 | —Lindsay Frost

ACC has released its chemical activity barometer (CAB) for May, showing continued US economic growth. The CAB increased 0.3% over May on a 3-month moving average basis—the 11th consecutive monthly gain—and is up 3.5% year on year. ACC says production of plastic resins used in consumer and institutional applications continues to expand, which suggests further gains in the economy driven by the consumer. Last month’s CAB showed 0.1% growth over April.

“Virtually all production-related indicators strengthened in June,” says Kevin Swift, chief economist at ACC. “Most notable is the healthy-paced production of plastic resins used in consumer and institutional applications, suggesting the consumer-led economic expansion is still in place.”

Swift added that, although conditions in Japan are improving and Europe’s recession appears to be leveling out, growth in China has slowed and prospects in other Asian markets remain weak—creating a plateau in US export volumes.

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.

The Chemical Production Regional Index (CPRI) for North America, meanwhile, inched up 0.2% sequentially in May. “Recent data for the United States show that production has been mixed in recent months, with strong year-earlier comparisons in synthetic rubber, bulk petrochemicals and organics, plastic res-ins, consumer chemistry, coatings, and other specialty chemicals,” Swift says. The Global CPRI rose 0.4% on a sequential basis in May, in line with first-quarter averages.

Separately, Cefic says EU chemicals output will decline 1% in 2013, a downward revision from December’s forecast of 0.5% growth. “The EU chemical industry is still facing headwinds from the weak European economy,” says Cefic president and BASF CEO Kurt Bock. This will mark the second consecutive year of EU output declines.













 
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