US chemical industry shows sustained growth, hints at recovering housing market
The American Chemistry Council's (ACC) most recent Chemical Activity Barometer (CAB) showed sustained growth for the sixth consecutive month and a 2.8 percent gain over January 2012 on a three month moving average (3MMA) basis.
According to ACC Chief Economist Dr. Kevin Swift, the growth hints at acceleration in the U.S. housing market.
“Recent data from the Commerce Department is bearing out what the CAB has been indicating for many months now — that an increasingly solid housing market continues to show signs of momentum and a return to normalcy,” Swift said. “The chemical industry’s early position in the supply chain uniquely positions the CAB against other economic indicators. Throughout last year and into this year we continue to see an acceleration of activity in construction-related plastic resins, coatings, pigments and other chemistry related to the building and construction industry.”
The U.S. Department of Commerce released data in January that showed seasonally adjusted nationwide housing starts rising 12.1 percent in December. Each housing start represents more than $15,000 of chemistry, ACC says.
The CAB economic indicator is derived from a composite index of chemical industry activity. The chemical industry has been found to consistently lead the U.S. 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.