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  • Weekly Economic Report

Weekly Chemistry and Economic Trends (September 24, 2021)

0.3% U.S. CPRI
3.9% Housing Starts
0.9% LEI

The number of new jobless claims rose, unexpectedly, for a second straight week, up 16,000 to 351,000 during the week ending 18 September. Continuing claims increased by 131,000 to 2.86 million and the insured unemployment rate for the week ending 11 September rose by 0.1 points to 2.1%.

Running tab of macro indicators: 16 out of 20

09-24-21 - Macro Table

The number of new jobless claims rose, unexpectedly, for a second straight week, up 16,000 to 351,000 during the week ending 18 September. Continuing claims increased by 131,000 to 2.86 million and the insured unemployment rate for the week ending 11 September rose by 0.1 points to 2.1%.

Following two months of gains, existing home sales fell 2.0% in August (down 1.5% Y/Y) with declines across all four major regions of the U.S. Inventories eased 1.5% to 1.29 million units, representing a 2.6-month supply. With the tight inventory situation, median home prices were up 14.9% Y/Y to nearly $357,000. New home sales rose 1.5% in August (off 24.3% Y/Y) with gains in all regions except the Midwest. The inventory of new homes for sale rose 3.3% and now represent a 6.1-month supply at the current sales pace. The median selling price for new homes rose 20.1% Y/Y to a record $390,990. Affordability is becoming increasingly difficult for many potential homebuyers.

09-24-21 - Housing Starts and Building Permits

Overall housing starts rose 3.9% in August, but single-family starts continued to move lower, off by 2.8%. Starts were higher across all regions except the West and were ahead 17.4% Y/Y compared to a year ago. Forward-looking building permits also rose, up 6.0% (13.5% Y/Y) with gains across all regions. Despite continued strong demand, shortages of both construction labor and building materials have been headwinds in recent months.  Following three months of decline, single-family homebuilder confidence (NAHB/Wells Fargo) rose in September as housing demand remains strong and materials costs eased.

09-24-21 - Index of Leading Economic Indicators (LEI)

Despite headwinds from the Delta variant and higher inflation, the Conference Board’s Leading Economic Index® (LEI) rose by 0.9% and follows gains of 0.8% in July and 0.6% in June. The trend is consistent with robust economic growth during the last several months of the year.

SURVEY OF ECONOMIC FORECASTERS
  • Moving through the end of Q3, nationwide new cases of Covid appear to have peaked, however many states are continuing to see increases in cases rates. While there has been some pull back in Covid-sensitive segments such as travel and hospitality, other indicators suggest that demand remains resilient. Supply chain disruptions and persistent challenges in shipping and logistics continue to weigh on manufacturers and distributive trade segments. Expectations among ACC’s panel of forecasters remain positive (though dampened somewhat) for 2021. Expectations are for continued rebound into 2022, though at a slower pace.
  • Compared to last month’s survey, growth expectations for GDP, consumer spending, and business investment in 2021 continued to ease. U.S. GDP is expected to grow by 6.0% in 2021, with a 7.7% gain in consumer spending and an 8.1% gain in business investment. Growth shifts lower in 2022 with a 4.3% gain in GDP and 3.8% growth in consumer spending, and a 5.9% gain in business investment.
  • Industrial production is expected to rise 5.8% in 2021 (slightly better than last month’s expectations) and 4.3% in 2022.
  • With continued curtailments in auto production due to shortages of semiconductors and other components, expectations for light vehicle sales were lowered again to 16.0 million in 2021 and 16.7 million in 2022. Expectations for housing starts remained steady at 1.58 million in 2021 and 1.58 million in 2022.
  • The unemployment rate is expected to average 5.5% in 2021 (slightly lower than last month) and 4.2% in 2022 (the same as last month).
  • With surging demand from reopening and persistent supply chain disruptions, expectations for consumer price inflation continued to rise. Consumer prices are expected to grow by 4.2% in 2021 and 3.1% 2022.
  • Compared to last month, expectations for interest rates (10-year treasury) were slightly higher for 2021 and 2022.
09-24-21 - Energy Table

The rig count rose by nine to 511 rigs during the week ending 17 September. Oil prices rose this week (to a two-month high) on supply concerns. With continued disruptions to some Gulf of Mexico production due to Hurricane Ida, U.S. oil inventories fell to their lowest level since October 2018. The Interior Department reports that as of Thursday (9/23) 16% of oil and 24% of natural gas production remain offline in the Gulf of Mexico.

For the business of chemistry, the indicators still bring to mind a green banner for basic and specialty chemicals.

09-24-21 - Chemical Table

According to data released by the Association of American Railroads, chemical railcar loadings, the best ‘real time’ indicator of chemical industry activity, rose by 1,091 carloads to 30,998 railcars during the week ending 18 September (week 37). Loadings were up 3.6% Y/Y, up 5.6% YTD/YTD and have been on the rise for 6 of the last 13 weeks.

09-24-21 - Chlor-Alkali Production

The Chlorine Institute (CI) reported that production of chlorine was 32,632 in August, down 2.4% over the previous month; YTD production was down 1.4% Y/Y. The output of co-produced caustic soda rose to 34,654, down 1.9% over July and YTD production was down 1.3% Y/Y.

The U.S. Geological Survey reported that monthly production of soda ash in July was 980 thousand tons, up 1.4% compared to the previous month and up 36.7% compared to July 2020. Stocks rose 16.0% over June to 261 thousand tons at the end of the month, an 8-day supply. Ending stocks were down 5.4% Y/Y.

09-24-21 - U.S. Chemical Production Regional Index

The U.S. Chemical Production Regional Index (U.S. CPRI), which is measured as a three month moving average (3MMA), fell by 0.3% in August following a 1.1% gain in July and a 3.4% increase in June. Reflecting hurricane disruptions and ongoing supply chain challenges, chemical output fell sharply in the Gulf Coast region and eased in all other regions except the Northeast. Compared with August 2020, U.S. chemical production rose 5.9%. Chemical production continued to be higher than a year ago in all regions.

Chemical production was mixed in August with an improving trend in the production of synthetic rubber, manufactured fibers, other specialty chemicals, fertilizers, coatings and consumer products. These gains were offset, however, by weakness in organic chemicals, plastic resins, and miscellaneous inorganic chemicals crop protection chemicals and adhesives.

As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. Following a 0.8% gain in July, manufacturing output continued to expand in August, by 0.5% (on a 3MMA basis). The 3MMA trend in manufacturing production was mixed with gains in the output of motor vehicles and parts, aerospace, construction supplies, machinery, computers, semiconductors, iron & steel products, foundries, plastic products, printing, textile mill products, apparel and furniture.

 

Note On the Color Codes

The banner colors represent observations about the current conditions in the overall economy and the business chemistry. For the overall economy we keep a running tab of 20 indicators. The banner color for the macroeconomic section is determined as follows:

Green – 13 or more positives
Yellow – between 8 and 12 positives
Red – 7 or fewer positives

For the chemical industry there are fewer indicators available. As a result we rely upon judgment whether production in the industry (defined as chemicals excluding pharmaceuticals) has increased or decreased three consecutive months.

For More Information

ACC members can access additional data, economic analyses, presentations, outlooks, and weekly economic updates through MemberExchange.

In addition to this weekly report, ACC offers numerous other economic data that cover worldwide production, trade, shipments, inventories, price indices, energy, employment, investment, R&D, EH&S, financial performance measures, macroeconomic data, plus much more. To order, visit https://store.americanchemistry.com/.

Every effort has been made in the preparation of this weekly report to provide the best available information and analysis. However, neither the American Chemistry Council, nor any of its employees, agents or other assigns makes any warranty, expressed or implied, or assumes any liability or responsibility for any use, or the results of such use, of any information or data disclosed in this material.

Contact us at ACC_EconomicsDepartment@americanchemistry.com

Upcoming Events of Interest

“Shocks, Shifts, and Emerging Economic Landscape”
63rd NABE Annual Meeting
26-28 September 2021
Marriott Crystal Gateway | Arlington, VA
National Association for Business Economics (NABE)
www.nabe.com

“The Evolving Impact of ESG on the Chemical Industry” Webinar
Joseph Chang - Global Editor | ICIS Chemical Business; Robert Westervelt - Editor-in-Chief | IHS Chemical Week; and Peter Young - CEO & Managing Director | Young & Partners
1:00 – 2:15 pm | 29 September 2021
Société de Chimie Industrielle
www.societe.org

American Chemistry Council

The American Chemistry Council (ACC) represents the leading companies engaged in the business of chemistry. ACC members apply the science of chemistry to make innovative products and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health and safety performance through Responsible Care®; common sense advocacy designed to address major public policy issues; and health and environmental research and product testing. The business of chemistry is a $486 billion enterprise and a key element of the nation's economy. It is among the largest exporters in the nation, accounting for ten percent of all U.S. goods exports. Chemistry companies are among the largest investors in research and development. Safety and security have always been primary concerns of ACC members, and they have intensified their efforts, working closely with government agencies to improve security and to defend against any threat to the nation’s critical infrastructure.

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