U.S. chemical production continues its gaining streak on a
monthly basis, according to the latest monthly report from the
American Chemistry Council (ACC). The chemical industry trade
group said that the U.S. Chemical Production Regional Index
(CPRI) inched up 0.6% in Feb 2013, following a revised 0.8% gain
a month ago. Monthly reading showed that chemical production
improved across all regions in February.
The U.S. CPRI, which was created by Moore Economics to track
chemical production in seven regions nationwide, 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 largest consumer
of chemical products, crept up 0.6% in February following a
revised 0.9% gain a month ago. Within this sector, output rose in
several key chemistry end-user markets including appliances,
aerospace, motor vehicles, construction materials, plastic
products, machinery, computers, paper, printing, apparel,
furniture and structural panels.
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.
Improving consumer spending and capital investment augur well for
The ACC said that chemical output was mixed across the segments
in February. Production gains across organic chemicals,
industrial gases, inorganic chemicals, pharmaceuticals,
pesticides, coatings, adhesives, and other specialty chemicals
were neutralized by declines in consumer products, plastic
resins, synthetic rubber, and manmade fibers, and fertilizers.
Overall chemical production rose 1.2% in February when compared
on a year-over-year basis. On a region-by-region basis,
production rose across all areas except the Mid-Atlantic and West
Coast regions. Production for the first two months of 2013, when
compared with the year-ago data, were up 1.3%.
On a monthly comparison basis, chemical production in the Gulf
Coast region, where key building block materials are produced,
edged higher 0.5% in Feb. The Midwest, Ohio Valley, Mid-Atlantic,
Southeast, Northeast regions showed gains of 0.8%, 0.4%, 0.8%,
0.6% and 0.7%, respectively. The West Coast region logged the
highest increase of 0.9%.
The chemical industry, which is among the biggest industries in
the U.S., is cyclical by nature and heavily linked to the overall
condition of the U.S. economy. The roughly $760 billion industry
has been consistently leading the U.S. economy's business cycle
due to its early position in the supply chain.
Last year, a challenging economic backdrop in Europe, sluggish
activity in China and uncertainties surrounding the U.S. fiscal
cliff weighed on the companies in the chemical space including
majors such as
EI DuPont de Nemours & Co
The Dow Chemical Company
Eastman Chemical Co.
However, the chemical industry is expected to fare better this
year given the gradual recovery in the U.S. economy, an improved
demand scenario in China and the signs of a revival in the U.S.
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
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