Barometer of chemical activity slightly up in March


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Unadjusted data shows a gain of 1.2% in March after gaining 0.9% in February. The diffusion index rebounded to 82% in March, well above the long-term average of 58%. The dissemination index marks the number of positive contributors compared to the total number of indicators monitored. The CAB reading for February has been revised upwards by 0.18 points and the reading for January has been revised downwards by 0.57 points. Data for March are provisional and subject to revision.

“The latest ACR reading is consistent with a strong expansion in trade, commerce and industry in the fourth quarter,” said Kevin swift, Chief Economist at ACC.

The CAB has four main components, each made up of a variety of indicators: 1) production; 2) share prices; 3) product prices; and 4) inventories and other indicators.

In March, production indicators were positive. Trends in construction-related resins and related performance chemicals have been strong and suggest further expansion after weak home sales and housing starts in February. The resins and chemistry used in other durable goods have been strong. Plastic resins used in packaging and for consumer and institutional applications were positive. The performance chemistry for the industry was mixed. US exports were positive, while stock prices continued to advance. Product and input prices were positive, as were inventories and other supply chain indicators.

The CAB is a leading economic indicator derived from a composite index of chemical industry activity. Due to its early position in the supply chain, it has been found that the activity of the chemical industry is consistently leading the business cycle of the US economy, and the barometer can be used to determine the points of turnaround and likely trends in the economy as a whole. Month-to-month movements can be volatile, so a three-month moving average of the CAB reading is provided. This gives a more coherent and illustrative picture of national economic trends.

Applying CAB since 1912, it has been shown to provide a lead of two to 14 months, with an average lead of eight months at cycle peaks, as determined by the National Bureau of Economic Research. The median advance was also eight months. At the bottom of the economic cycle, the CAB leads one to seven months, with an average lead of four months. The median advance was three months. The CAB is rebased to the average advance (in months) by an average of 100 over the base year (2012 was used) from a reference time series. The latter is the Federal Reserve’s industrial production index.

Chemical activity barometer for the last six months and months one year ago*



March 20

20 october

November 20

Dec 20

January the 21st

the 21st of February

March 21st









CABIN (3MMA)

119.77

118.45

120.04

121.63

123.58

124.86

126.38

% M / M

-2.9

1.1

1.3

1.3

1.6

1.0

1.2

% Y / Y

-1.6

-3.1

-1.9

-0.6

0.4

1.2

5.5









TAXI

112.03

119.28

122.39

123.23

125.11

126.25

127.78

% M / M

-8.9

0.7

2.6

0.7

1.5

0.9

1.2

% Y / Y

-8.3

-2.2

0.0

0.4

0.7

2.6

14.1


* Percentage changes may not reflect index values ​​due to rounding.

The CAB includes indicators relating to the production of chlorine and other selected alkalis, pigments, plastic resins and other basic industrial chemicals; stock market data from chemical companies; hours worked in chemicals; public information on the prices of chemicals; sales to end-use industry inventories (or customers); and several broader leading economic measures (building permits and new orders). Each month, ACC provides a barometer number reflecting activity data for the current month, as well as a three-month moving average. The CAB was developed by the Department of Economics at ACC.

The unadjusted current month CAB readings are based on high frequency weekly and daily data. For example, we use equity data for the Thursday before the release date. Using mid-month data may result in significant revisions if conditions change significantly in the second half of the month. We have moved the CAB release dates to the last Tuesday of each month. We hope this will minimize revisions.

To view the full dataset, please visit https://www.americanchemistry.com/CAB-vs-Industrial-Production/. The next CAB is scheduled for April 27, 2021 at 9:10 a.m.ET.

The CAB is designed and prepared in accordance with ACC Antitrust Guidelines and FTC Safe Harbor Guidelines; does not use company specific pricing information as input data; and the data is aggregated such that company and product specific data cannot be determined. Note: ACC has made every effort to prepare this publication to provide the best information available. However, neither the American Chemistry Council, nor any of its employees, agents or other assigns makes any warranty, express or implied, or assumes any responsibility for any use, or the results of any such use, of any information or data disclosed in this material.

SOURCE American Chemistry Council

Related links

www.americanchemistry.com

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