The Chemical Activity Barometer (CAB), an economic indicator created by the American Chemistry Council (ACC), was stable (0.0% change) in December on a three-month moving average (3MMA) basis following a 0.1% gain in November. On a year-over-year (Y/Y) basis, the barometer rose 0.4% (3MMA) and follows two months of negative year-earlier comparisons.
The unadjusted December data was flat (0.0% change) following a revised 0.5% gain in November. The diffusion index fell to 47% in December. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for November was revised upward by 0.19 points and that for October up by 0.26 points.
“The CAB signals slow gains in U.S. commerce into the third quarter of 2020,” says Kevin Swift, chief economist at ACC.
The CAB has four main components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators. Production-related indicators eased in December. Although trends in construction-related resins, pigments and related performance chemistry were mixed, they suggest further slow gains in housing, which has been on an upward trend. Plastic resins used in packaging and for consumer and institutional applications were mixed. Performance chemistry eased, reflecting weakness among industrial end-use markets. U.S. exports were weak. Equity prices rose sharply again this month, while product and input prices were mixed. Inventory and other indicators were mixed.
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