HOUSTON (ICIS)--The chemical activity barometer (CAB) continued its upward trend with a 0.5 point increase in June over May, following a gains every month this year, the American Chemistry Council (ACC) said on Tuesday.
On a three-month moving average (3MMA), the CAB increased to 96.7 in June over 96.2 in May. Year over year, the June CAB gained 4.3 points.
Components of the CAB were mixed, with production flat, equity prices down, product prices up and inventories up.
Though production was flat, plastic resins and performance chemistry were stronger and US exports are growing. Additionally most of the 28 specialty chemical sectors monitored are expanding, the ACC said.
“Overall, we are seeing signs of continued growth in the U.S. economy, and trends in construction-related chemistry show a market which has not yet reached its full potential,” said Kevin Swift, chief economist at ACC.
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 ACC 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 will be released on 29 July.
With shale gas dominating the headlines and ethane a major talking point in the petrochemical industry, ICIS editors in Houston are closely monitoring the situation. See the ICIS special report on shale, ethane and US ethane exports at https://www.youtube.com/watch?v=bYbKzYlYMGA.