US chemical production flat, trending downward
According to the American Chemistry Council (ACC), the US Chemical Production Regional Index (US CPRI) slipped by 0.1% in July, following flat growth in June. Chemical production declined in the Gulf Coast, Midwest, Ohio Valley, Mid-Atlantic, Southeast and West Coast regions. Production was flat in the Northeast region.
Though overall US chemical activity declined in July, based on a three-month moving average, individual components measured by the index were mixed. Gains in the output of inorganic chemicals, industrial gases, consumer products, coatings and synthetic rubber were offset by lower production of plastic resins, fertilizers, adhesives, organic chemicals, pesticides, synthetic rubber and pharmaceuticals.
In contrast to chemical production, output of the nation’s overall manufacturing sector rose by 0.2% in July, following a 0.2% gain in June. Within the manufacturing sector, output in several key chemistry end-use markets increased, including motor vehicles, aerospace, computers and electronics, plastic products and printing. Despite lower export demand from Europe and Asia, the US manufacturing sector continues to grow, though more slowly than during the first quarter, as export demand has softened due to the ongoing crisis in Europe and slower economic growth in China.
Compared to July 2011, total chemical production in all regions was up by 0.6% and was up year-over-year in all regions except the Mid-Atlantic, Southeast and West Coast regions. On a year-to-date basis (comparing the first seven months of 2012 with those a year ago), chemical production was up 0.3% nationally. Only the Ohio Valley and Northeast regions were ahead on a year-to-date basis.
The US CPRI was developed by Moore Economics to track chemical production activity in seven US regions. It is comparable to the US industrial production index for chemicals published by the Federal Reserve. The US CPRI is based on information from the Federal Reserve. To smooth month-to-month fluctuations, the US CPRI is measured using a three-month moving average. Thus, the reading in July reflects production activity during May, June and July.
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