The U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.9% in October following a 0.8% gain in September and a 1.0% increase in August, according to the American Chemistry Council (ACC).
During October, chemical output expanded in all regions, with the largest gains occurring in the Northeast region. The U.S. CPRI is measured on a three-month moving average (3MMA) basis.
In October, chemical production continued to improve in many segments including chlor-alkali, other inorganic chemicals, organic chemicals, industrial gases, plastic resins, synthetic dyes and pigments, consumer products, adhesives, other specialty chemicals and fertilizers. Production trends eased in coatings, manufactured fibers, synthetic rubber and crop protection chemicals.
As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. The manufacturing recovery continued for a fourth consecutive month in October, with overall factory activity up by 0.8% (3MMA). The trend in production rose in nearly all key chemistry end-use industries, with the strongest gains seen in iron and steel, aerospace, foundries, tires, machinery and apparel.
Compared with October 2019, U.S. chemical production was off 4.9% on a year-over-year basis, the seventeenth consecutive month of declines, but shows steady improvement over the past several months. Chemical production remained lower than a year ago in all regions, with the largest year-ago declines occurring in the Northeast, Mid-Atlantic, and West Coast regions.
The chemistry industry is one of the largest industries in the United States, a $565 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.