ICIS March LBB eases slightly, remains consistent with recessionary conditions

HOUSTON (ICIS)–The ICIS leading business barometer (LBB) eased slightly in March, but conditions remain consistent with the US falling into a recession, Kevin Swift, ICIS senior economist for global chemicals, said.

The cumulative decline in the barometer is down by 8.1% from its peak in February 2022, Swift said.

Cumulative declines of 3% have signalled a recession in the past.

Swift said he takes some encouragement from the fact that the index is stabilising.

“Raw material and other input prices eased, as did selling prices,” Swift said. “In the wake of the banking turmoil, equity prices eased slightly, and inventory and other broader leading economic measures were mixed.”

In March, the share of expanding indicators, known as diffusion, was 47%, the same as last month.

The ICIS LBB is derived from 17 indicators relating to the production of materials and other industries sensitive to cyclical fluctuations; raw material and input prices; selling prices; hours worked; relative equity prices; industry sales-to-inventories; and several broader economic leading economic measures.

Monthly data on the ICIS LBB are available back to January 1947.

The ICIS LBB leads at US business cycle peaks by seven months on average and four months at business cycle troughs.