US recovery is slowing but still showing modest growth – ACC

23 April 2013 17:19  [Source: ICIS news]

WASHINGTON (ICIS)--The already modest US economic expansion is slowing, but the recovery should see measured gains through the rest of this year, a key chemicals industry barometer indicated on Tuesday.

“The US economy remains in a state of slow growth,” said the American Chemistry Council (ACC) with release of its monthly chemical activity barometer (CAB).

The CAB showed a narrow 0.2% gain this month from the March measure, but an advance nonetheless and the ninth consecutive monthly improvement.

The CAB combines data from a range of chemicals and sectors, including production of chlorine and other alkalis, 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.

Martha Moore, director of economics and policy analysis at ACC, noted that while US growth remains modest, it is still showing improvement.

“We’re still seeing growth, albeit slow, and that’s good news,” Moore said.

In addition, she said the April CAB data indicate that the three-year run of “false spring” economic data has come to an end.

“The data are actually showing a break from the trends of the past three years in which we’ve had a first-quarter false-positive, only to have things drop off in the second and third quarters of the year,” Moore said.

The April CAB also indicates that some areas of the chemicals and resins industries are doing better than others, reflecting the performance – or lack thereof – in downstream consumer sectors.

Significantly, Moore said that activity in construction-related plastic resins, coatings, pigments and other building chemistries is flattening out, suggesting that “the pace of the housing recovery will slow”.

But plastic resins used in consumer and institutional applications continue to expand, she said, “suggesting further gains driven by the consumer but at a moderated pace”.

“The growth is decelerating, but overall the CAB continues to suggest measured expansion of the US economy through 2013,” Moore said.

The council noted that because the chemicals industry holds an early position in the nation’s supply chain, chemical sector activity is a leading indicator for the overall economy.

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

By: Joe Kamalick
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