By ICN GroupChemical, May 22, 2020

U.S. chemical production edged lower in April

The lower level of chemical activity is directly related to supply chain disruptions and the lockdown of much of the U.S. economy during April.

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) tumbled 3.1 percent in April following a 1.0 percent decline in March and a 0.4 percent decline in February. During April, chemical output fell across all regions, with the steepest decline in the Gulf Coast region. The lower level of chemical activity is directly related to supply chain disruptions and the lockdown of much of the U.S. economy during April.
 
Production fell across all chemical segments. Within several major segments, however, production of some chemical materials increased, including supply chains tied to personal protective equipment (PPE) and disinfection products.
 
As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. With many factories shut down during the month, overall manufacturing activity fell by 6.3 percent on a three-month moving average (3MMA) basis, with declines across all industry sectors – in some cases quite steep.
 
Compared with April 2019, U.S. chemical production was 5.3 percent lower, the eleventh and highest consecutive month of year-over-year declines. Chemical production was lower than a year ago in all regions, with the largest declines in the Northeast, Mid-Atlantic, and West Coast regions.
 
The chemistry industry is one of the largest industries in the United States, a $553 billion enterprise. The manufacturing sector is the largest consumer of chemical products, and 96 percent of manufactured goods are touched by chemistry. 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 includes monthly revisions as published by the Federal Reserve. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. The April reading reflects production activity during February, March and April.

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