The economic indicator, shown to lead US business cycles by an average of eight months at cycle peaks, increased 0.1% over July on a three-month moving average (3MMA) basis, marking its fourth consecutive monthly gain.
The barometer is now up 3.8% over a year ago, the largest year-over-year increase since September 2010. The index itself is at its highest point since June 2008. Prior CAB readings for March through July were all revised.
“As we approach the fourth quarter, the US economy seems to be making strides, compared to the baby steps of earlier in the year,” said Dr. Kevin Swift, chief economist at the American Chemistry Council. “The Chemical Activity Barometer is showing a strengthening of year-over-year growth and suggests an economy which finally may be gaining momentum,” he added.
While some other economic indicators continued to paint a mixed picture, Swift pointed to solid fundamentals in the housing market, confirmed by further gains in construction-related plastic resins, coatings, pigments and other chemistry, all suggesting the recovery in housing will continue. Similarly, production of plastic resins used in consumer and institutional applications is growing at a strong pace.
Chemical equities continued to outperform the benchmark S&P 500, and inventory balances as well as future orders were improved, offering further bright spots in the index.
The Chemical Activity Barometer is a leading economic indicator derived from a composite index of chemical industry activity. It was developed by the economics department at the American Chemistry Council.