18 December 2012 17:16 [Source: ICIS news]
WASHINGTON (ICIS)--A key measure of US chemicals sector activity held steady in December from November after four straight monthly gains, suggesting that the US economy will see slow but steady growth in 2013, a report said on Tuesday.
In the previous four months, the CAB three-month average had seen successive gains from the July reading of 89.3 to November’s 91 score.
The CAB combines data from a range of chemicals and sectors including production of chlorine and other alkalies, pigments, plastic resins and other basic industrial chemicals.
The barometer also factors in chemical company stock data, hours worked in chemicals manufacturing and publicly available chemicals pricing and inventories. Broader data sets, such as housing starts and new orders for general manufactured goods, also are included, according to the ACC.
Kevin Swift, chief economist at the council, said that December’s stable CAB figure following four monthly gains indicates “slightly slower activity in construction-related plastic resins, coatings and pigments”.
However, Swift said that “the longer term trend seems to suggest that the recovery in housing will continue”.
The US housing industry, especially new home construction, is a key downstream consuming sector for chemicals manufacturers.
After a long and deep slump since the 2003-2006 housing bubble burst, the sector finally began to recover this year and appears poised to gain strength over the next two years.
“More new homes are being built today than since July 2008,” Swift said, noting that “each housing start represents more than $15,000 [€11,400] of chemistry.”
The ACC CAB report follows an economists’ forecast on Monday saying that the housing sector could grow by as much as 20% next year and the year after, although growth in other sectors would be much slower.
Swift said the CAB data “continue to suggest steady but slow growth prospects for 2013”.
($1 = €0.76)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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