US chemical industry activity increased by 0.3% from last month, suggesting sub-par growth in 2013, the American Chemical Council (ACC) said on Tuesday.
The Chemical Activity Barometer (CAB), a monthly index developed by ACC economists, showed an increase in production and chemical company equities in September. Prices and inventories remained flat.
September’s growth represents the third consecutive monthly increase.
However the three-month moving average (3MMA) increase suggested “steady but slow growth prospects” in the months ahead.
“While it is encouraging to see three consecutive months of gains, this is not yet cause for celebration,” said Kevin Swift, ACC chief economist. “Rather, what we’re seeing is that the CAB is signalling sub-par economic growth into 2013 as the economy continues to face strong headwinds and concerns around the fiscal cliff crystallize.”
Swift compared the current trend to the pattern of 2010 and 2011, when there was a “strong upswing” in the fourth quarter. However, the first quarter showed a gradual slowing of growth, followed by consecutively declining months into the third quarter.
“We’ve compared this situation to the old Charlie Brown comic strip where Lucy holds the football for Charlie, but at the last moment he goes to kick it, she removes it,” Swift said.
“Just as the first–quarter discussion about economic recovery is finally gaining traction, the proverbial football – the recovery – disappears, hence, the Charlie Brown effect.”
The CAB was at 88.9 in June and showed a steady increase at 89.2 in July, 89.6 in August and 89.9 in September.