ACC upbeat on US data; warns high gasoline prices may hurt demand

30 March 2012 21:24  [Source: ICIS news]

HOUSTON (ICIS)--The American Chemistry Council (ACC) has welcomed recent data indicating continued expansion in the US economy, but warned that high gasoline prices could stall consumer spending, the industry association said in a report released on Friday.

It said that the US economy has continued to expand, bolstered by growing personal incomes and consumer spending.

Official February data showed personal income increased by 3.2% year on year, while consumer spending rose 4.1%.

“These reports suggest that the economy may be strengthening in light of improving payroll gains, rising wages, and a willingness to take on additional debt,” ACC said in the report.

“Pent-up demand, a stabilizing housing sector, and an accommodative Fed are other factors behind a strong growth scenario.”

However, the ACC warned that rising gasoline prices could stall consumer spending.

Gasoline prices in the US have shot up by about 24% since the start of the year to $3.4006/gal on 29 March, according to ICIS.

Meanwhile, major plastic resins production in the US rose 11.9% year on year in February, while year-to-date production totalled 12.7bn lbs, up 7.4% year on year, the ACC reported.

“Analysis of underlying demand indicates that customers have been restocking their thermoplastics inventories thus far this year,” the ACC said. “This follows after a stretch of drawing down inventories at the end of 2011."

By: Bobbie Clark
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