The Chemical Activity Barometer (CAB), an economic indicator created by the American Chemistry Council (ACC), is up 0.1% in September on a three-month moving average (3MMA) basis following a 0.1% decline in August and gains averaging 0.2% per month during the second quarter. On a year-over-year (Y/Y) basis, the barometer is flat at 0.0%.
The unadjusted measure of the CAB is up 0.6% in September following a 0.7% decline in August. The diffusion index rises to 67% in September. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for August was revised upward by 0.09 points and that for July by 0.34 points.
“Although one month does not make a trend, the positive September CAB reading and upward revisions in the data are encouraging signs,” says Kevin Swift, chief economist at ACC. “The barometer indicates gains in U.S. commerce into the second quarter of 2020, but at a slow pace.”
Production-related indicators in September are slightly positive, according to ACC. Housing activity rebounded sharply in August, while trends in construction-related resins, pigments and related performance chemistry were mixed, suggesting slow gains in housing activity. Plastic resins used in packaging and for consumer and institutional applications were mixed. Performance chemistry improved. U.S. exports were mixed, reflecting trade tensions, a high dollar and a weak global manufacturing environment. Equity prices rebounded this month, as did product and input prices. Inventory and other indicators were positive.
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