Europe construction business up in August CMCI

LONDON (ICIS)–August sentiment in the construction-linked chemical industries was mixed, with profitability and business conditions trending strongly upwards but other indicators more pessimistic, according to ICIS chemical markets confidence index (CMCI) data on Wednesday.

The rebound in profitability and business brings both indexes more in line with previous months’ trends after a severe dip in July.

This was despite the latest Eurostat figures showing stalling construction output in June in the wider EU due to falling building construction.

However, the CMCI trend was reversed in order book volumes, with current conditions more pessimistic and expectations for the next 12 months higher compared with July.

Expectations for profitability and business conditions over the next 12 months, on the other hand, were down compared with July.

The mixed expectations for the market may reflect an uncertain situation following the UK’s vote to exit the EU.

Early statistics showed encouraging economic trends for the UK in July, but figures for the construction industry were not as impressive. Seasonally adjusted transactions in the residential market fell by 8.3% in July compared with the same month last year, according to HM Revenue and Customs statistics released this week.

The latest Office of National Statistics figures for the UK also show a similar trend for June, with output falling both year on year and month on month.

Construction CMCI May to August change

The ICIS construction CMCI tracks sentiment in the acrylonitrile butadiene styrene (ABS), acrylate esters/acid, CAN, butanediol (BDO), caprolactam, ethylene dichloride (EDC), expandable polystyrene (EPS), ethanolamines, fatty alcohols, hexane, isocyanates, methyl ethyl ketone (MEK), methanol, methyl isobutyl ketone (MIBK), mixed xylenes, nylon, oxo-alcohols, polycarbonate (PC), polyethylene (PE), propylene, polystyrene (PS), polyvinyl chloride (PVC), solvent naphtha, titanium dioxide (TiO2), VAM, vinyl chloride monomer (VCM) and white spirit markets.

The newly established ICIS Europe CMCI aggregates sentiment from hundreds of petrochemical market players actively involved in price negotiations across more than 60 different markets.

The Europe CMCI runs from +100, to -100, with zero on each index representing neutral, or uncertain conditions, a negative score indicating bearish expectations and a positive score representing bullish expectations. The indices also gather sentiment on the comparison between the current situation and the situation across the past 12 months to give a complete picture of current market conditions and confidence. The information is gathered in the third week of each month.  A full methodology is available on request.

For more details on the overall Europe CMCI data, click here