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U.S. Chemical Production Edged Down in July; Year-Over-Year Production Continues to Firm


Contact: Patrick Hurston (202) 249-6506  
Email: patrick_hurston@americanchemistry.com

WASHINGTON (August 20, 2013) – According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) edged down by 0.1 percent in July, following an upwardly revised 0.2 percent gain in June. During July, chemical production was lower in all seven regions.

On a three-month moving average (3MMA), output of the nation’s overall manufacturing sector edged higher by 0.1 percent July, following revised flat growth in June. Within the manufacturing sector, output in several key chemistry end-use markets grew, including appliances, construction materials, computers and electronics, semiconductors, plastic products, rubber products, textiles and apparel. Manufacturing demand is a significant driver of demand for chemistry products. Factory activity, however, continues to be uneven, with weak economic growth in key export markets offsetting gains from stronger housing activity and consumer spending.

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

Compared to July 2012, total chemical production in all regions expanded to a 1.4 percent year-over-year gain, following an upwardly revised 1.2 percent gain in June. All regions, except the West Coast, were ahead compared to a year ago. Indeed, the year-over-year comparisons improved in four of seven regions, including the Midwest, Mid-Atlantic, Southeast, Northeast, and West Coast regions. Comparing the seven months 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 July reflects production activity during May, June, and July.

Following an upwardly revised 0.1 percent gain in June, chemical production in the Gulf Coast region fell by 0.4 percent in July. In July, production was up 1.2 percent compared to a year before, and was up by 1.4 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 slipped by 0.2 percent in July, erasing an upwardly revised 0.2 percent gain in June. Compared to July 2012, Midwest chemical production was up by 0.7 percent, but was flat on a year-to-date basis.

In the Ohio Valley region, largely influenced by production of basic chemicals; plastics and synthetic rubber; coatings; and consumer products, chemical production slipped by 0.3 percent in July, following revised flat growth in June. Compared to July 2012, production in the region was up by 3.5 percent, and was also up 3.7 percent on a year-to-date basis.

In the Mid-Atlantic region, where pharmaceutical manufacturing is prominent, chemical production edged lower by 0.1 percent in July, following an upwardly revised 0.3 percent increase during June. Compared to July 2012, Mid-Atlantic chemical production was up by 0.2 percent, but remained down by 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 fell by 0.3 percent in July, following an upwardly revised 0.1 percent gain during June. Compared to July 2012, Southeast region chemical production was up by 0.8 percent year-over-year and was higher by 0.3 percent on a year-to-date basis.

In the Northeast region, which is influenced by pharmaceutical manufacturing and other specialty chemical manufacturing, chemical production slipped by 0.1 percent during July, following an upwardly 0.3 percent gain in June. Compared to July 2012, Northeast region chemical production was up by 1.0 percent, and was 0.1 percent higher on a year-to-date basis.

In the West Coast region, chemical production edged lower by 0.1 percent in July, following an upwardly revised 0.2 percent increase in June. Chemical production in the West Coast region was off by 0.1 percent from last year and remained down 1.2 percent on a year-to-date basis.

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