US indicators remain mixed for chems – group

06 April 2007 20:47  [Source: ICIS news]

TORONTO (ICIS news)--This week’s US economic reports and indicators provided a “temperamental rollercoaster” for the chemicals and other industries, the American Chemistry Council (ACC) said on Friday.

 

Some reports – on factory orders, and manufacturing and non-manufacturing activity - suggested that the impact of the US housing slump was starting to spread, the industry association said.

 

Factory orders continued to disappoint and indicated that the 2006 fourth-quarter slump in business investment carried over into the 2007 first quarter, ACC said. 

 

“Business investment was widely anticipated to offset weakness emanating from housing. But alas, it is not meant to be,” it said.

 

Also, US automobile sales were below expectations in March, ACC said.

 

US car companies reported that light vehicle sales fell slightly from a 16.6m-unit annual pace in February to a seasonally adjusted annualised pace of 16.3m units in March.

 

The auto sector is an important market for US chemicals makers as the typical vehicle contains over $2,215 (€1661) in chemicals, plastics, coatings, adhesives, fibres, rubbers and related products and processes, it added.

 

Positive economic signals for chemicals included railcar loadings numbers that indicated higher activity in the industry, the ACC said.

 

Citing data from the Association of American Railroads for the week ended 31 March, ACC said that railcar loadings of polymers and basic chemicals were 32,897, up 9.3% from the same week in 2006.

 

Loadings have been on the rise for seven of the last 13 weeks, ACC said.

 

Railcar loadings data were the best real-time indicator of industry activity in polymers and other basic chemicals, it added.

 

Also positive was the US Labor Department’s jobs data, released on Friday, with 180,000 new non-farm jobs in March and the unemployment rate at 4.4%, down 0.1 percentage point. This could support consumer spending, ACC said.

 

But Wall Street analysts said that relatively tight labour markets seemed to back Federal Reserve Bank chairman Ben Bernanke’s concerns about inflation, making it unlikely that interest rates would be cut in the near-term.

 

($1 = €0.75)

By: Stefan Baumgarten
+1 713 525 2653

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