WASHINGTON (November 24, 2020) – The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), rose 0.8 percent in November on a three-month moving average (3MMA) basis following a 1.0 percent gain in October. On a year-over-year (Y/Y) basis, the barometer fell 2.4 percent in November.
The unadjusted data show a 1.3 percent gain in November following a 0.5 percent gain in October and a 0.7 percent gain in September. The diffusion index eased from 76 percent to 71 percent in November. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for October was revised upward by 0.38 points and the reading for September was revised downward by 0.06 points. These were highly volatile months for the data. The November data are provisional and subject to revision.
“With seven straight months of gains, the November CAB reading is consistent with recovery in the U.S. economy,” 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.
In November, production-related indicators were positive. Trends in construction-related resins, pigments and related performance chemistry were mixed. Resins and chemistry used in light vehicles and other durable goods were strong. Gains in plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry for industry rebounded and U.S. exports were mixed. Equity prices rebounded and product and input prices were positive. Inventory and other supply chain indicators were positive.
Well, that's good news. Here's hoping it continues into the new year.