Chemical Industry Activity Climbs As Business Confidence Grows

Feb. 24, 2017
The Chemical Activity Barometer posts a strong gain in February following a similar gain in January.

The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posts a strong gain in February of 0.4%, following a similar 0.4% gain in January. This follows a steady 0.3% gain every month during the third quarter of 2016. All data is measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB is now up 5.0% percent over this time last year, marking its strongest year-over-year performance since September 2010. On an unadjusted basis the CAB climbed 0.1% percent in February, following a 0.5% gain in January.

The Chemical Activity Barometer has four primary components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.

In February all of the four core categories for the CAB improved, with the diffusion index strengthening to 71%. Production-related indicators were positive, with the housing report indicating slipping starts, but improving permits. This was coupled with an improvement in U.S. exports. Equity prices also improved at a robust pace, reflecting an improvement in consumer and business confidence. Overall the barometer continues to hint at gains in U.S. business activity through the third quarter.

Chemical Processing's Economic Snapshot includes the CAB. You can see several years worth of snapshots here.

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