If the chemical industry’s leading economic indicators are correct, we will enjoy a healthy overall economy over the next nine months.
The American Chemistry Council’s monthly Chemical Activity Barometer, expanded 0.5% in January on a three-month moving average (3MMA) basis and 0.7% on an unadjusted basis.
This follows an upwardly revised 3MMA gain of 0.7% in December and 0.5% in November. The CAB is up 4.0% compared to a year earlier, indicating a robust economy well into the third-quarter of 2018, the council said.
The CAB consists of four primary components incorporating several indicators: production, equity prices, product prices and inventories.
In January, following some weather-related stagnation, production-related indicators showed solid improvement, ACC reported.
That comes on the heels of a 1.9% 3MMA rise in December, after a 1.4% gain in November, and a 0.4% gain in October, according to the council’s U.S. Chemical Production Regional Index. In December, chemical output increased in all regions, with the largest gains in the Gulf Coast, Ohio Valley, Midwest and Southeast regions.
The council also noted that strong trends in construction-related resins, pigments, and performance chemistry all suggested further gains in housing activity.
Production of plastic resins used in packaging, other consumer and institutional applications totaled 7.3 billion pounds during December 2017, an increase of 7.7% compared to the same month in 2016.
A robust stock market rally continued to push equity prices higher, while product prices and inventories were also positive, ACC reported.
The council also said that its diffusion index expanded to 71%. This index marks the number of positive contributors relative to the total number of indicators monitored.