US manufacturing surveys show decline in 2010 expectations

18 December 2009 16:20  [Source: ICIS news]

HOUSTON (ICIS news)--A pair of indicators for the US manufacturing industry showed declines in current conditions and expectations for the next six months, the American Chemistry Council (ACC) said on Friday in its weekly economic report.

The Empire State Manufacturing Survey, prepared by the New York Federal Reserve, indicated that conditions for New York manufacturers - including chemical producers - fell sharply in December following four consecutive months of improvement.

New York state has the third-largest chemical industry in the US, with shipments totalling $37bn (€25.9bn) each year. The survey is considered a bellwether of US manufacturing activity, according to the ACC.

The survey’s index fell by 21 points to 2.6 in December - still indicating continued expansion by remaining in positive territory, but at a slower rate.

The indexes for new orders, shipments and prices all declined, suggesting that price increases are not being passed along, the ACC said. Moreover, the employment indexes also slipped back into negative territory.

Indexes for six-month expectations remained positive, but signalled “somewhat less widespread optimism” than in recent months, the ACC said.

The Business Outlook Survey prepared by the Philadelphia Federal Reserve showed a slight increase in current activity, increasing 3.7 points to 20.4 in December. That marks the fifth consecutive month the index has been in positive territory.

That survey’s future general activity index, however, “decreased notably” to 24.4 in December from 36.8 in November, the ACC said. The 24.4 reading is the lowest since March.

The Philadelphia region is home to a number of chemical companies with a strong regional focus in fine and other specialty chemicals, finished pharmaceuticals, and some inorganic chemicals.

Elsewhere in the ACC's weekly report, the group's Economic Forecasters Survey held relatively steady from the previous month. US gross domestic product (GDP) is now expected to rise by 2.7% in 2010, a 0.1 percentage point improvement from November.

However, US GDP is now expected to expand by 2.5% in 2011, down 0.1 percentage points from the prior survey.

($1 = €0.70)

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By: Ben DuBose
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