According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) rose by 0.8% in July following a 1.6% decline in June and a 2% decline in May.
During July, chemical output expanded in all regions, with the largest gains in the Gulf Coast, Midwest, and Ohio Valley regions. The U.S. CPRI is measured on a three-month moving average (3MMA) basis.
Chemical production improved in many segments, including, plastic resins, chlor-alkali, organic chemicals, industrial gases, synthetic dyes and pigments, consumer products, and fertilizers. Production continued to move lower in adhesives, coatings, other specialty chemicals, crop protection, synthetic rubber, and manufactured fibers.
As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. The recovery strengthened in July, with overall factory activity up by 4.9% on a 3MMA basis. Among industry segments, there was broad improvement, with gains in the output of food and beverages, appliances, motor vehicles, aerospace, construction supplies, fabricated metal products, computers, semiconductors, refining, iron and steel, foundries, plastic products, rubber products, tires, structural panels, printing, textile mill products, apparel, and furniture.
Compared with July 2019, U.S. chemical production was off by 5.9%—the 14th consecutive month of year-over-year declines, but an improvement over the past several months. Chemical production remained lower than a year ago in all regions, with the largest declines in the Northeast 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% 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 July reflects production activity during May, June, and July.