The July chemical activity barometer (CAB) index was flat
after declining three consecutive months, historically a sign
of slowing economic activity, the American Chemistry Council
(ACC) said on Friday.
July data continues to suggest that broader US
economic growth in the second half of 2012 will be weak, while
the CAB also suggests a slowing of US exports during the rest
of the year, said Dr. Kevin Swift, chief economist at
Looking at the data, one bright spot for the economy
is the positive trends in the light vehicles and housing
sectors which could possibly suggest a forward momentum
building in these sectors.
The chemical industrys early position in the supply chain
uniquely positions the CAB against other economic indicators,
the ACC says.
The CAB provides a long lead for business cycle peaks and
troughs and can help identify emerging trends in the wider US
economy within sectors closely linked to the business of
chemistry such as housing, retail, and automobiles.
Applying the CAB back to 1947, it has been shown to provide
a longer lead (or perform better) than the National Bureau of
Economic Research (NBER), by two to 14 months, with an average
lead of eight months.
NBER is the organization that provides the official start
and end dates for recessions in the US.
The preliminary July data from the CAB remained steady at
88.5 from previous the month. This follows three consecutive
months of decline.
Data showed production-related chemistry indicators were
mixed at best. In addition, trends in plastic resins used in
consumer and institutional applications have softened and
overall trends suggest slowing US exports.
For further details, read the ACCs official news
release by clicking here.