Chemical Equity Prices Signal US Economic Growth

March 25, 2014
Rising Chemical Activity Barometer indicates continued U.S. economic growth for year ahead.

“Without chemicals, life itself would be impossible.” A corollary to this old marketing phrase might be: “Without chemicals, an uptick in the U.S. economy would be hard to predict.”

The chemical industry occupies an early spot in the supply chain so when chemicals are doing well, it signals better times for the economy in general.

That was the case today as the American Chemistry Council released its March Chemical Activity Barometer (CAB). The March CAB was 95.1, up 0.8% from February and 3.4% higher than March 2013.

Moreover, the 3-month moving average for March showed a 0.3% gain, an increase from the 0.2% growth in late 2013. The data points to "modest but continued growth" in the U.S. economy for the rest of 2014, ACC stated.

“Winter weather extremes have carried into March and continue to impact many of the economic readings, but all signs point to an expanding U.S. economy through 2014,” said Kevin Swift, ACC’s chief economist. “Strengthening chemical equity prices, combined with the expansion of sales in intermediate goods, which constitute roughly 85% of overall chemical sales, are encouraging signs for the continued health of the U.S. economy.”

Three of the four primary components of the CAB ­ production, equity prices and new orders ­ were up, while product/selling prices were flat. Production-related indicators such as construction-related coatings, pigments, and plastic resins all improved, ACC noted.

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