The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), rose 1.0% in February on a three-month moving average (3MMA) basis following a 1.8% increase in January. On a year-over-year (Y/Y) basis, the barometer rose 1.3% in February.

The unadjusted data show a 0.3% gain in February following a 2.0% increase in January. The diffusion index eased to 77% in February. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for January was revised upward by 0.90 points and that for December was revised downward by 0.03 points. Keep in mind that the February data are provisional and subject to revision.

“With ten months of gains, the latest CAB reading is consistent with expansion in the U.S. economy,” Kevin Swift, Chief Economist at ACC,  said.

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 February, production-related indicators were positive. Trends in construction-related resins and related performance chemistry were solid. Resins and chemistry used in other durable goods were strong. Plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry for industry was strong. U.S. exports were positive, while equity prices increased. Product and input prices were positive, as were inventory and other supply chain indicators.