ACC: Global chemical production rises while U.S. output remains steady in September

Nov. 9, 2023
“In September, chemical production increased in all regions with South America recording the strongest gain,” said Martha Moore, ACC’s chief economist.
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WASHINGTON (November 6, 2023; ACC release) — According to the American Chemistry Council (ACC), the Global Chemical Production Regional Index (Global CPRI) trended higher by 0.6% in September, following a revised 0.6% gain in August. In the U.S., the U.S. Chemical Production Regional Index (U.S. CPRI) was flat in September, following a 0.8% gain in August. Both indices are measured on a three-month moving average (3MMA) basis to reduce month-to-month volatility.

“In September, chemical production increased in all regions with South America recording the strongest gain,” said Martha Moore, ACC’s chief economist. “Even though global production was higher on a year-over-year basis, North America and Europe exhibited some weakness as production trended somewhat below last year’s level.”

“In the U.S., restocking activity for basic chemicals and synthetic materials used in a wide variety of manufactured goods picked up a bit in September following a prolonged period of destocking. The gain was offset by lower output of specialty chemicals, however.”

Key findings:
The gain in September reflects a recovery in China’s chemical production. Despite housing woes and economic slowdown, it seems that China’s production bottomed out in July. Production in Japan also shows strength as production has been positive over the last six months.
Global output increased in all segments, with synthetic materials showing the highest gain.
According to U.S CPRI, output in the U.S. was flat in September with gains in the Gulf Coast offsetting declines in other regions of the country.
The gain in the Gulf Coast reflected stronger production of basic chemicals and synthetic materials that support the manufacture of building materials, automobile parts, just to name a few. The largest declines were in the Northeast, Mid-Atlantic, and West Coast regions, reflecting lower production of specialty chemicals and consumer products (i.e., personal care & cleaning products). 

The Global CPRI measures the production volume of the chemical industry for 55 key nations, sub-regions, and regions, all aggregated to the world total. While most data are seasonally adjusted at source, some are adjusted using the U.S. Census Bureau’s X-12 model to present data comparable to the United States. In a few cases, ACC creates indices of production based on actual production data weighted according to industry structure. The index uses the total value added as a proxy for individual country weights to arrive at the total. This method accounts for the changes in each country’s share relative to global production, which is more reflective of the ever-changing global production dynamics.

The Global CPRI measures production activity generally consistent with the overall industry nomenclature of NAICS 325 (less pharmaceuticals) and the EU NACE 20 industries. The index measures the production of soaps and detergents, personal care products, fertilizers, and other downstream products in addition to measuring inorganic chemicals, organic chemicals, plastic resins, synthetic fibers, synthetic rubber, adhesives and sealants, coatings, and other specialty chemicals. Production of pharmaceuticals is excluded. 

The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. The U.S. CPRI includes the most recent Federal Reserve benchmark revision released on March 28, 2023. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. The reading in September reflects production activity during July, August, and September. 

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