US chemical activity barometer falls in February

The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), dipped 0.2% this month after a 0.3% gain in January.

The figures are as measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB remains up 3.2% over this time last year. 

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. 

During February, the components were mixed, with production and equity prices up, product prices down, and inventories continuing to improve. 

“Heavy snows in New England and severe cold weather across much of the nation are affecting growth prospects this quarter,” said Dr. Kevin Swift, chief economist at the ACC. “However, chemical equity prices still surged in February and have outperformed the overall stock market, which is always a good sign."

The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the US economy’s business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy, according to the ACC. 

Month-to-month movements can be volatile, so a three-month moving average of the barometer is provided.