US chemical output flat-lines in Sep amid uncertainties

08 November 2012 18:12  [Source: ICIS news]

WASHINGTON (ICIS)--US chemicals production was flat in September for the second consecutive month, the American Chemistry Council (ACC) said on Thursday. Output was 0.5% lower than September last year.

In its monthly chemical production regional index (CPRI) for the US, the council said that output was down in five of the seven regions tracked by the index, with only the US Gulf coast area and the Ohio valley showing gains.

But the 0.2% production gains reported for those two regions were wholly offset by declines of 0.1% to 0.3% in the other five regions, including the midwest, the mid-Atlantic area, the southeast, northeast and west coast.

Although the chemicals sector was flat in both August and September, the process industry is doing better than the overall US manufacturing sector, according to the index data.

The council said its survey showed that US overall manufacturing slipped by 0.1% in September and followed a 0.1% decline in August.

“Manufacturing, which had been a driver of growth over the past two years, has weakened in recent months,” the council’s index report said.

That weakening in overall US manufacturing was attributed to an intensifying slowdown in the global economy and continuing uncertainty for investors in the wake of the US national elections.

On Wednesday this week, US stock markets plunged following the nationwide US vote, with the Dow Jones Industrial Average falling 313 points or 2.36% to 12,932.73.

Part of the uncertainty that tumbled shares on Wednesday is driven by worries that the White House and Congress might be unable to come to terms on measures to avert the so-called “fiscal cliff” that will kick in on 1 January.

The fiscal cliff is the combination of several expiring Bush-era income tax cuts and other effective tax increases, plus a mandated sharp reduction in federal military and domestic spending.

All together, the expiring tax cuts and spending cutbacks could take as much as $800bn (€624bn) out of the US economy. 

The US Congressional Budget Office (CBO) has warned that if policymakers fail to avert the cliff – by restoring some or all of the lapsing tax cuts and paring back the federal spending reductions or a combination of both – the US will fall into recession in the first half of next year.

($1 = €0.78)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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