HOUSTON (ICIS)--The US chemical activity barometer (CAB) in February was flat over January, partly because of winter weather disrupting production, the American Chemistry Council (ACC) said on Tuesday.
The flat CAB of 94.1 in February ended nine consecutive monthly gains on a three-month moving average (3MMA). The February rate is flat from January and up 0.2% over the December 2013 figure of 93.9.
The February CAB is up 2.1% year on year, indicating slower year growth versus previous months.
The CAB reading for December 2013 and January 2014 were revised slightly higher from earlier reports, likely due to skewed statistical reporting from unusual winter weather, the ACC said.
Results from the four primary components of the CAB were mixed in February, with flat product/selling prices and inventories, higher equity prices and lower production.
"It will take some time before the data reflect normalcy, but we know concretely that chemical equity prices strengthened in February and are outpacing that of the broader market, which is very encouraging," Kevin Swift, chief economist at ACC, said.
He the recent bad weather in the US is contributing to the lower production indicators in February.
The CAB is a leading economic indicator derived from a composite index of the chemical industry, which has been found to consistently lead the US economy's business cycle because of its early position in the supply chain, the AAC said.
The CAB combines data from a range of chemicals and sectors, including production of chlorine and other chlor-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.
The next CAB is planned to be released 25 March.