U.S. Chemical Production Up Higher Due To Hurricanes

WASHINGTON, D.C. – December 12, 2017 – According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.3 percent in October, following a 1.2 percent decline in September, and a 0.4 percent decline in August. The upturn reflects the swift recovery from Hurricanes Harvey and Irma during August and September. During October, chemical output increased in all regions.

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

Nearly all manufactured goods are produced using chemistry in some form or another. Thus, manufacturing activity is an important indicator for chemical production. On a three-month-moving average basis, manufacturing activity rose by 0.5 percent in October, following a small gain in September. Production expanded in several chemistry-intensive manufacturing industries, including food and beverages; motor vehicles; aerospace; construction supplies; machinery; fabricated metal products; computers and electronics; semiconductors; iron and steel products; foundries; paper and furniture.

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Compared to October 2016, U.S. chemical production was ahead 1.4 percent on a year-over-year basis, an improving trend. Chemical production was ahead of year ago levels in all regions. 

The chemistry industry is one of the largest industries in the United States, a $768 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 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 October reflects production activity during August, September, and October.