US economy, chem industry still middling - ACC
20 June 2008 20:41 [Source: ICIS news]
HOUSTON (ICIS news)--A US trade group continues to give middling scores to business conditions for the nation's chemical industry and the overall economy, it said on Friday in a weekly report.
For chemicals, production rose in again in May, a trend confirmed by railcar loadings, according to a weekly report by the American Chemistry Council (ACC).
However, overall US industrial production declined for the second month in a row, the ACC said. Also, inflation increased sharply in the US and other developed countries.
US housing starts continued to fall, indicating that the industry still has not bottomed out, the ACC said.
The housing industry is a key downstream consuming sector for chemicals and chemicals-based products such as roofing materials, adhesives, insulation, siding, paints and coatings, synthetic materials, polyvinyl chloride (PVC) pipes and a broad range of other construction materials.
US natural gas inventories reported increases that were below average due to unseasonably high temperatures, the ACC said.
Natural gas is the key feedstock for US chemicals.
Moreover, economists surveyed by the ACC became more pessimistic about 2009. They lowered their expectations fro economic growth, industrial production, housing starts and automobile sales.
On the other hand, an index made up of leading US economic indicators increased by 0.1% in May, following a small increase in April, the ACC said. The improvement - while weak - could indicate that growth is about to pick up.
For the overall economy, eight out of 20 economic indicators were positive, the ACC said. As a result, the group posted a yellow banner, which lies between its best and worst ratings.
The ACC also gave the chemical industry a yellow banner.
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