Chemical Industry Report Suggests Consumer Confidence Strengthening
The American Chemistry Council's (ACC) monthly Chemical Activity Barometer (CAB) released today continued to show a slowly expanding U.S. economy, increasing 0.6 percent over January on a three-month moving average (3MMA) basis.
The year over year 3MMA showed a 2.9 percent gain over February 2012. The CAB is an economic indicator derived from a composite index of chemical industry activity. Due to its early position in the supply chain, chemical industry activity leads that of the overall economy. February was the CAB's seventh consecutive monthly gain.
"The increase in chemical industry activity continues to be a good sign for the overall health of the economy," said Kevin Swift, chief economist at ACC. "But uncertainty is still present and the impending sequester is likely to stifle growth slightly for the remainder of the year. The bright spots continue to be increasing activity in construction-related coatings, pigments, and plastic resins, all suggesting a continuing recovery in the housing market. Likewise, plastic resins used in consumer and institutional applications are growing faster, hinting at stronger consumer confidence."
Reflecting the findings of the CAB, a survey published Monday by the National Association for Business Economists (NABE), found that more than 95% of the forecasters surveyed believe that growth in real GDP in 2013 is likely to be negatively affected by uncertainty surrounding the U.S. fiscal imbalances and issues linked to the continuing resolution, sequestration and the debt ceiling.
Participants in the NABE survey also expect that real personal consumption expenditures will continue last year's 1.9% growth rate in 2013 and then accelerate to 2.5% growth in 2014. Panelists also suggested strong growth in residential investment, housing starts, and home prices.
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