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US chemical production on the up

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Hydrocarbon Engineering,

According to the American Chemistry Council (ACC), the US Chemical Production Regional Index (US CPRI) expanded by 0.2% in September, following a 0.3% decline in August and flat growth in July. In September, chemical production rose across all regions, with the largest gains in the Ohio Valley, Gulf Coast and Midwest regions.

Also measured on a three month moving average (3MMA) basis, chemical production was mixed. There were gains in the production output trend of adhesives, fertilisers, pesticides, coatings, organic chemicals, synthetic rubber, plastic resins, pharmaceuticals and other speciality chemicals. These gains were offset by declines in the output trend in inorganic chemicals, consumer products, industrial gases, dyes and pigments, and manufactured fibres.

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 3MMA basis, manufacturing activity was flat in September, following marginal gains in July and August. Production expanded in several chemistry intensive manufacturing industries, including food and beverages; motor vehicles; construction supplies; computers and electronics; semiconductors; petroleum refining; plastic products; rubber products; textile products; and apparel.

Compared to September 2015, US chemical production was ahead by 0.6% on a year over year basis, an improving comparison compared to last month. Chemical production remained ahead of year ago levels in all regions with the largest gains in the Ohio Valley and Southeast regions.

The chemistry industry is one of the largest industries in the United States, a US$797 billion enterprise. The manufacturing sector is the largest consumer of chemical products, and 96% of manufactured goods are touched by chemistry. The US CPRI was developed to track chemical production activity in seven regions of the United States. The US 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 US CPRI is measured using a three month moving average. Thus, the reading in September reflects production activity during July, August, and September.

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