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U.S. Chemical Production Ends Year in Positive Territory; All Major Producing Regions See Gains in December


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

WASHINGTON (January 23, 2013) – According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.3 percent in December, following a revised 0.1 percent gain in November. Chemical production rose in all major producing regions for the first time since February 2012.

Domestic demand for U.S. manufactured goods is a key driver for U.S. chemistry. With improvements in export markets, vehicle production, and construction, manufacturing ended the year on a positive note. This bodes well for U.S. chemical production at the start of 2013.

Based on a three-month moving average, output of the nation’s overall manufacturing sector posted a 0.5 percent gain in December, following a 0.2 percent gain in November. Within the manufacturing sector, output in several key chemistry end-use markets increased, including appliances, motor vehicles, construction materials, computers, semiconductors, structural panels, plastic and rubber products, paper, textile products and apparel.

Also measured on a three-month moving average basis, chemical production was mixed. Gains in the output of organic chemicals, industrial gases, plastic resins, manmade fibers, synthetic rubber, consumer products, and other specialty chemicals were offset by lower production of pharmaceuticals, pesticides, fertilizers, and inorganic chemicals.

Compared to December 2011, total chemical production in all regions was up by 0.2 percent, following a 0.3 percent year-over-year gain in November. The year-over-year comparisons remained ahead in the Gulf Coast and Ohio Valley regions. Buoyed by continued advantages from shale gas, production from these two regions, in particular, has outpaced overall chemical production. Comparing the entire year 2012 to 2011, chemical production was up 0.2 percent nationally, with only the Gulf Coast and Ohio Valley regions posting gains for the year.

The chemistry industry is one of the largest industries in the United States, a $760 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 December reflects production activity during October, November, and December.

Following a 0.1 percent decline in November, chemical production in the Gulf Coast region edged up by 0.1 percent in December. In December, production was up 1.7 percent compared to a year before, but was up by 0.4 percent for the year as a whole. 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 rose by 0.3 percent during December, following flat growth during November. Compared to December 2011, Midwest chemical production was off by 0.7 percent, and was down 0.4 percent for the year as a whole.

In the Ohio Valley region, which is largely influenced by production of basic chemicals, plastics and synthetic rubber, coatings, and consumer products, chemical production rose by 0.3 percent in December, following a revised 0.2 percent gain in November. Compared to December 2011, production in the region was up by 3.4 percent, and was up 2.1 percent for the year as a whole.

In the Mid-Atlantic region, where pharmaceutical manufacturing is prominent, chemical production increased by 0.4 percent in December, following a flat growth during November. Compared to December 2011, Mid-Atlantic chemical production was off 1.6 percent, and was off 0.9 percent for the year as a whole.

In the Southeast region, which is influenced heavily by production of basic chemicals, fibers, agricultural and other chemical products, chemical production edged up by 0.2 percent in December, following flat growth during November. Compared to December 2011, Southeast region chemical production was off by 0.6 percent year-over-year, and off by 0.2 percent for the year as a whole.

In the Northeast region, which is influenced by pharmaceutical manufacturing and other specialty chemical manufacturing, chemical production rose by 0.5 percent during December, following a revised 0.2 percent gain in November. Compared to December 2011, Northeast region chemical production was off 0.7 percent, and was off by 0.1 percent for the year as a whole.

In the West Coast region, chemical production rose by 0.4 percent in December, following flat growth in November. Chemical production in the West Coast region was off 2.5 percent from last year, and remained down 1.2 percent for the year as a whole.

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