gasworld Business Intelligence investigates how the Chemical Activity Barometer relates to the US industrial gases business.
What is the Chemical Activity Barometer?
The American Chemical Council (ACC), the founders of the Chemical Activity Barometer (CAB), note that the chemical industry produces materials that are used very early in the US supply chain, so by monitoring various indicators in the chemical industry, it is possible to identify more general economic events months in advance. The CAB has an average lead of 8 months, meaning that any significant peak or trough in the index, will likely be replicated but the US economy around 8 months after.
The CAB is generated by compiling various indicators such as production and prices for selected chemicals, such as chlorine, pigments and plastic resins, in addition to other indicators such as hours worked in the chemicals sector, chemical company stock data, end-user industry sales-to-inventories, and building permits.
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