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July Chemical Activity Barometer shows signs of slowing economic activity

ACC today released the July report of the Chemical Activity Barometer (CAB), a new leading macroeconomic indicator. This is the second monthly report of the CAB, developed by ACC Economics and Statistics, to anticipate the peaks and troughs in the overall U.S. economy and highlight potential trends in other domestic industries.

The July CAB data was flat at 88.5 after declining three consecutive months, which, historically, is a sign of slowing economic activity. This suggests that U.S. economic growth in the second half of 2012 will be continue to be weak – something we forecasted in our first CAB report in June.

Looking at the data specifically, we saw that key CAB indicators – production-related indicators, chemical company equities and inventories – remained flat, while prices were down. Trends in plastic resins used in consumer and institutional applications were also down.

The July CAB data did show positive trends in light vehicle manufacturing and in housing, which could suggest a potential recovery in each of these sectors in the coming months (we will be able to offer more insight in our August CAB report).

Chemical Activity Barometer for the Latest Six Months and Year-Ago Month

Jul 11 Feb 11 Mar 12 Apr 12 May 12 Jun 12 Jul 12
CAB 89.7 89.8 90.3 90.0 89.4 88.5 88.5
% M/M 0.5 0.2 0.6 -0.3 -0.7 -1.0 0.0
% Y/Y 3.5 -0.1 -0.4 -0.1 -0.3 -0.9 -1.2
CAB (3 MMA) 89.6 89.5 89.9 90.0 89.9 89.3 88.8
% M/M -0.1 0.6 0.5 0.2 -0.1 -0.7 -0.6
% Y/Y 3.0 -0.2 -0.1 -0.2 -0.3 -0.4 -0.8

*Percentage changes may not reflect index values due to rounding.

The CAB is a composite index of chemical industry measures that produces an indicator of broader economy-wide activity. It includes indicators drawn from a range of sectors closely linked to the business of chemistry such as housing, retail, and automobiles. And because the products of chemistry are positioned so early in the supply chain, it is uniquely situated to determine turning points and trends in the downstream sectors and ultimately the wider economy.

Please subscribe to our feed to receive next month’s Chemicals Activity Barometer update. You may also visit our webpage dedicated to learning more about chemistry’s influence on the U.S. and global economy.

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