U.S. chemical production edged lower in February

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) edged lower by 0.2% in February following a 0.1% gain in January and a 0.2% decline in December. During February, chemical output declined across all regions except the Gulf Coast.

Chemical production was mixed over the three-month period. There were gains in the three-month moving average (3MMA) output trend of organic chemicals, plastic resins, chlor-alkali, other inorganic chemicals, other specialty chemicals, synthetic rubber and manufactured fibers. These gains were offset by declines in the output of industrial gases, coatings, adhesives, fertilizers, synthetic dyes and pigments, crop protection chemicals and consumer products.

Nearly all manufactured goods are produced using chemistry in some form. Thus, manufacturing activity is an important indicator for chemical production. On a 3MMA basis, manufacturing activity was flat in February, following gains in December and January. Output expanded in several chemistry-intensive manufacturing industries, including food & beverages, appliances, construction supplies, fabricated metal products, computers & electronics, semiconductors, refining, foundries, oil & gas extraction, plastic products, rubber products, paper, structural panels, printing, and furniture.

Compared with February 2019, U.S. chemical production was off by 1.8% on a year-over-year basis, the ninth consecutive month of year-over-year declines. Chemical production was lower than a year ago in all regions, with the largest year ago declines in the Mid-Atlantic, West Coast and Northeast regions.

The chemistry industry is one of the largest industries in the United States, a $553 billion enterprise. The manufacturing sector is the largest consumer of chemical products, and 96% of manufactured goods are touched by chemistry. The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by 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 February reflects production activity during December, January and February.