MOSCOW (MRC) -- The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), fell 0.4 percent in October on a three-month moving average (3MMA) basis following stable activity during the third quarter. On a year-over-year (Y/Y) basis, the barometer was off 0.5 percent (3MMA), said Americanchemistry.
The unadjusted measure of the CAB for October showed a 0.7 percent decline. The diffusion index fell to 47 percent in October – the first time since May 2016 that it was below 50 percent. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for September was revised downward by 0.44 points and that for August by 0.25 points.
“The CAB signals a pronounced slowdown in U.S. commerce through the second quarter of 2020,” said Kevin Swift, chief economist at ACC.
The CAB has four main components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.
Production-related indicators in October were mixed. Trends in construction-related resins, pigments and related performance chemistry were slightly positive and suggest slow gains in housing activity. Plastic resins used in packaging and for consumer and institutional applications were mixed, suggesting headwinds for the consumer. Performance chemistry eased, reflecting the global manufacturing slowdown. U.S. exports were mixed, equity prices slumped and product and input prices fell. Inventory and other indicators were positive.
The CAB is a leading economic indicator derived from a composite index of chemical industry activity. Due to its early position in the supply chain, chemical industry activity has been found to consistently lead the U.S. economy’s business cycle, and this barometer can be used to determine turning points and likely trends in the broader economy. Month-to-month movements can be volatile, so a three-month moving average of the CAB reading is provided. This provides a more consistent and illustrative picture of national economic trends.
As MRC informed earlier, Russia's output of products from polymers rose in September by 5.2% year on year. However, this figure increased by 1.7% year on year in the first nine months of 2019. According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films was slightly over 107,300 tonnes, compared to 110,000 tonnes a month earlier. Output of films products grew in January-September 2019 by 9.1% year on year to 893,000 tonnes.
Last month's production of non-porous boards, sheets and films rose to 32,900 tonnes from 33,100 tonnes in August. Thus, overall output of these products reached 284,100 tonnes over the stated period, up by 11.3% year on year.