U.S. chemical manufacturers report their company’s activity level overall (e.g., sales, production, output) deteriorated in the fourth quarter (Q4) of 2023, according to latest findings from ACC’s Chemical Manufacturing Economic Sentiment Index (ESI). While chemical manufacturers’ sentiment around the state of the economy – US and global – remained negative in Q4, their outlook is for improvement over the coming six months. Chemical manufacturers expect demand to recover and their own company’s activity levels to improve in the short-term.
Key Findings
- Demand Weakened: New orders for U.S. chemicals declined in Q4. Orders were down for both domestic orders and exports. Over Q4, about half (53%) of chemical manufacturers reported the volume of new orders had decreased. Looking ahead six months, chemical manufacturers anticipate gains in the volume of both domestic and foreign orders.
- Production Costs Mixed: Following an uptick in Q3, energy costs (for fuel and power) eased in Q4, and the ESI reading dropped 26.9 points to -17.4. Input/raw materials costs continued to soften over Q4 though at a decelerated pace. Transportation costs declined over every quarter in 2023. Labor costs rose over every quarter in 2023.
- Regulatory Burden Increased: Many manufacturers (43%) report their regulatory burden grew in Q4 and even more (55%) expect it to rise further in the coming six months.
The ESI provides quarterly insights from chemical companies engaged in nearly every aspect of the manufacturing sector and the U.S. economy.
You can view the complete findings here.
