US chemical activity barometer slips in February
2/29/2016 12:00:00 AM
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), slipped 0.1% in February following flat performance in January and two months of revised gains in November and December 2015.
All data is measured on a three-month moving average (3MMA).
Accounting for adjustments, the CAB remains up 1.5% over this time last year, a decline of 50% from activity of one year ago when the barometer logged a 3.0% year-over-year gain from February 2014. On an unadjusted basis, the CAB rose 0.1% following two consecutive monthly declines.
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, production-related indicators were mixed, reflecting some improvement in plastic resins used in packaging as well as a downturn in certain performance chemistries related to the oil and gas sector. Equity prices significantly rebounded from January, joined by a firming in product prices. Inventories were negative.
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. Month-to-month movements can be volatile, so a three-month moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends.
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