The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council, eased 0.3 percent in June on a three-month moving average (3MMA) basis following a 4.6 percent decline in May. On a year-over-year (Y/Y) basis, the barometer fell 12.0 percent in June.

 

The unadjusted data show a 3.5 percent gain in June following a 2.2 percent gain in May and a 6.3 percent decline in April. The diffusion index rose from 35 percent to 53 percent. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for May was revised upward by 2.68 points and the April reading was revised upward by 0.05 points.

 

“While the latest CAB reading is consistent with a recession, two consecutive months of gains in the unadjusted data is a positive development,” said Kevin Swift, chief economist at ACC. “We’ll want to see at least another month of gains in order to conclude that the economy has turned a corner.”   

 

Production-related indicators were slightly positive in June. Trends in construction-related resins, pigments and related performance chemistry were mixed, as were resins used in appliances, light vehicles, machinery and other durable goods. Plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry rebounded and U.S. exports were weak. Equity prices were mixed and product and input prices are firming. Inventory and other supply chain indicators were mixed.