U.S. Chemical Production Rises for Second Consecutive MonthU.S. Chemical Production Rises for Second Consecutive Month
June 4, 2009
According to the American Chemistry Council (ACC), as measured by a three-month moving average, U.S. chemical production rose by 0.1% in April, following a 0.6% gain in March. Chemical production rose in five of seven regions during April. To smooth month-to-month fluctuations, the chemical production regional index (CPRI) is measured using a three-month moving average.
The business of chemistry provides many key building block materials that are converted into end use products and/or used in industrial processes. Going into the second quarter, demand for goods and services remains weak amid mounting job losses and an uncertain economic environment. As a result, many businesses along the supply chain continue to work off existing inventories. Preliminary data for April suggest that production declines in the chemical industry are slowing and are gaining in some segments, including petrochemicals and derivatives, plastic resin and materials, agricultural chemicals, and adhesives.
Compared to April 2008, total U.S. chemical production was off 10.2%. Regionally, year-over-year chemical production declined in all regions. On a year-to-date basis, chemical production was down 11.1% for the first three months of this year compared to the first three months of last year.
Following a 1.3% gain in March, chemical production in the Gulf Coast region rose 0.5% in April. Compared to a year ago, production was down 16.4% and down 18.1% on a year-to-date basis. The Gulf Coast region is dominated by the production of key building block materials, such as petrochemicals, inorganics, and synthetic materials.
In the Midwest region, which is influenced by production of agricultural chemicals, plastics, paints, and other chemical products, chemical production was flat in April, following a 0.7% gain in March. Compared to April 2008, Midwest chemical production in the region was off 9.6% year-over-year and down 10.5% on a year-to-date basis.
In the Ohio Valley region, which is largely influenced by production of basic chemicals, plastics and synthetic rubber, coatings, and consumer products, chemical production was flat in April, following a 0.6% advance in March. Compared to April 2008, production in the region was off by 12.9% and down 13.7% on a year-to-date basis.
In the Mid-Atlantic region, which is dominated by pharmaceutical manufacturing, chemical production was flat in April, following a 0.6% gain in March. Mid-Atlantic chemical production was down 7.1% compared to April 2008 and down 7.9% on a year-to-date basis.
In the Southeast region, which is influenced heavily by production of basic chemicals, fibers, agricultural and other chemical products, chemical production was up by 0.2% in April, following a 0.8% gain in March. Southeast region chemical production was off 10.0% on a year-over-year and down 11.1% on a year-to-date basis.
In the Northeast region, also influenced by pharmaceutical manufacturing and other specialty chemical manufacturing, chemical production was down 0.2% April, following a 0.2% gain during March. Compared to April 2008, Northeast region chemical production fell 6.5% and down 6.8% on a year-to-date basis.
In the West Coast region, chemical production slipped 0.1% in April, following a 0.3% gain in March. Chemical production in the West Coast region was down 6.5% from last year and down 7.0% on a year-to-date basis.
The Chemical Production Regional Index (CPRI) was developed by Moore Economics to track chemical production activity in seven regions of the United States. It is comparable to the U.S. industrial production index for chemicals published by the Federal Reserve. The CPRI is based on information from the Federal Reserve.
For more information, visit www.americanchemistry.com.
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