ACC: US chemical production flat in June compared to May, up 1.1% year-over-year; production up in Midwest, Mid-Atlantic, Northeast and West Coast regions

Mathew Kearney

WASHINGTON , July 31, 2013 (press release) – According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) was flat in June following a 0.1 percent gain in May. During June, chemical production rose in the Midwest, Mid-Atlantic, Northeast and West Coast Regions. Activity declined in the Gulf Coast and Ohio Valley regions, and activity in the Southeast was flat.

On a three-month moving average (3MMA), output of the nation’s overall manufacturing sector edged higher by 0.1 percent in June, following a 0.1 percent decline in May. Within the manufacturing sector, output in several key chemistry end-use markets grew, including appliances, motor vehicles, computers and electronics, semiconductors, plastic products and apparel. Manufacturing demand is a significant driver of demand for chemistry products and activity has been uneven as weakness in export markets is offset by improvements in construction and motor vehicles, both of which have long supply chains that are important to the business of chemistry.

Also measured on a 3MMA basis, overall chemical production was again mixed. Gains in the output of pharmaceuticals, consumer products, synthetic dyes and pigments, industrial gases, plastic resins, synthetic rubber, and pesticides, were offset by lower production of organic chemicals, chlor-alkali, adhesives, coatings, fertilizers, other specialties, and manmade fibers.

Compared to June 2012, total chemical production in all regions accelerated to a 1.1 percent year-over-year gain, following an upwardly revised 0.9 percent gain in May. The year-over-year comparisons improved in four of seven regions, including the Midwest, Mid-Atlantic, Southeast, and Northeast regions. Comparing the first half of 2013 to that in 2012, chemical production was up 0.8 percent nationally, with five of the seven regions posting gains.

The chemistry industry is one of the largest industries in the United States, a $770 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 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 U.S. CPRI is based on information from the Federal Reserve. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. Thus, the reading in June reflects production activity during April, May, and June.

Following flat production in May, chemical production in the Gulf Coast region edged down by 0.2 percent in June. In June, production was up 2.1 percent compared to a year before, and was up by 2.2 percent 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 improved by 0.1 percent in June, flat production in May. Compared to June 2012, Midwest chemical production was up by 0.7 percent, and also up by 0.2 percent 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 slipped by 0.1 percent in June, following a 0.4 percent gain in May. Compared to June 2012, production in the region was up by 4.3 percent, and was also up 4.3 percent on a year-to-date basis.

In the Mid-Atlantic region, where pharmaceutical manufacturing is prominent, chemical production edged higher by 0.2 percent in June, following a 0.1 percent increase during May. Compared to June 2012, Mid-Atlantic chemical production was down by 0.3 percent, and was off 0.8 percent 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 in June, following revised flat growth during May. Compared to June 2012, Southeast region chemical production was up by 0.9 percent year-over-year and was higher by 0.5 percent on a year-to-date basis.

In the Northeast region, which is influenced by pharmaceutical manufacturing and other specialty chemical manufacturing, chemical production rose by 0.1 percent during June, following an upwardly 0.2 percent gain in May. Compared to June 2012, Northeast region chemical production was up by 0.5 percent, and was flat on a year-to-date basis.

In the West Coast region, chemical production was up by 0.1 percent in June, following a revised 0.1 percent decline in May. Chemical production in the West Coast region was off 0.7 percent from last year and remained down 1.4 percent on a year-to-date basis.

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