U.S. chemical output rose narrowly on a monthly basis in
January as activity across a host of key end-use industries was
stymied by harsh winter weather, according to the latest monthly
report from the American Chemistry Council (ACC).
The Washington, DC-based chemical industry trade group noted that
the U.S. Chemical Production Regional Index (CPRI) moved up 0.3%
in January, following a 0.6% rise a month ago with gains
witnessed across all seven regions.
Created by Moore Economics to track chemical production in seven
regions nationwide, the U.S. CPRI is comparable to Federal
Reserve's industrial production index for chemicals. The CPRI is
measured using a three-month moving average.
Output from the U.S. manufacturing sector, the biggest consumer
of chemical products, was flat in the reported month as bad
weather hindered activities across a number of industries.
Nevertheless, within this sector, output rose in several
chemistry end-user markets including fabricated metal products,
computers, semiconductors, rubber products, printing, textile
products and apparel.
The manufacturing sector serves as a barometer to gauge the
overall health of the U.S. economy and is a major driver for the
chemical industry which touches around 96% of manufactured goods.
The ACC said that chemical output was mixed across the segments
in January. Production gains across chlor-alkali, industrial
gases, synthetic dyes and pigments, adhesives, coatings,
synthetic rubber, consumer products, plastic resins, pesticides
and other specialties were masked by declines in manmade fibers,
organic chemicals and fertilizers.
Overall chemical production inched up 0.3% year over year in the
reported month. On a region-by-region basis, gains were witnessed
across Midwest, Ohio Valley and Southeast regions.
On a monthly comparison basis, January reading showed that
chemical production in the Gulf Coast region, where key building
block materials are produced, moved up 0.4%. Output rose 0.3%
across Mid-Atlantic, Southeast and West Coast regions. Ohio
Valley raked in the highest monthly gain of 0.5%. Production rose
0.4% and 0.2% in Midwest and Northeast, respectively.
The roughly $770 billion U.S. chemical industry is cyclical by
nature and heavily linked to the overall condition of the
nation's economy. It has been consistently leading the U.S.
economy's business cycle due to its early position in the supply
CELANESE CP-A (CE): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
EASTMAN CHEM CO (EMN): Free Stock Analysis
To read this article on Zacks.com click here.
Last year, Europe's debt crisis, effects of sequestration along
with weakness across some key end-use markets weighed on
companies in the chemical space including majors such as
While a still soft European market coupled with other
industry-specific challenges continues to pose downside risks,
the global chemical industry is expected to fare relatively
better this year, aided by healthy Chinese demand, significant
capital investment and a shale gas boom in the U.S.
The ACC envisions U.S. chemical production to rise 2.5% in 2014
and further improve to a 3.5% gain next year. Growth will be
backed by strong agricultural market fundamentals, healthy demand
from light vehicles market and a gradual recovery in the housing
market. On the global front, the trade group sees production to
move up 3.8% in 2014 and 4.1% in 2015 with healthy gains expected
across North America and emerging markets.