Weekly chemistry and economic trends (May 26, 2023)


Basic orders for durable goods


Core PCE price index (y/y)

Current tab of macro indicators: 12 of 20

26-05-23-Macro summary

The number of new claims for unemployment benefits increased by 4,000 to 229,000 in the week ending May 20. The number of new claims for continuation benefits fell by 5,000 to 1.79 million, and the insured unemployment rate remained unchanged in the week ending May 13. at 1.2%.

05-26-23-Price Index_Inflation

Consumer spending rose by 0.8% in April, which is a strong pace after two months of modest increases of 0.1%. Both expenditure on goods and services increased. Thanks to an increase in rental income and salaries (private salaries), personal income increased again in April and was 0.4%. As spending grew faster than income growth, the personal saving rate fell from 4.5% to 4.1% in April. The Personal Consumer Price Index (PCE) has been declining this year, but increased from 4.2% y/y in March to 4.4% y/y in April. The Fed is looking at the “core” PCE price index because its goal is to bring inflation down. The core index excludes food and energy. The core index fluctuated around 4.6-4.7%YoY and rose from 4.6% to 4.7% in April. This latest news suggests persistent inflation and could mean further tightening of monetary policy by the Fed.

Strong orders for defense capital goods boosted orders for durable goods, which rose 1.1% in April. Orders for basic business goods rose 1.4% in April, breaking a streak of monthly declines as a slowdown in demand for goods dampened corporate investment in capital equipment. Core orders increased by 2.6% y/y, while core business orders increased by 2.7% y/y.

New home sales rose in April for the second month, up 4.1% in April. Sales activity increased in the Midwest and South regions, offsetting declines in the rest of the country. Stocks of new homes available for sale also increased. As sales growth outpaced inventory growth, monthly supply fell from 7.9 in March to 7.6 in April, its lowest level in a year. With inventories of existing homes extremely low, driven by homeowners’ reluctance to give up low mortgage rates, there has been renewed activity in new-build homes. Sales of new homes increased by 11.8% y/y.

The second estimate of real GDP showed an annual growth rate of 1.3% in the first quarter of 2023, slightly higher than the first estimate published last month. Growth in consumer spending, exports, government spending and non-residential fixed investment was offset by a decline in private investment in inventories and residential fixed investment. Imports also increased. Fourth quarter GDP was revised upwards to 2.6%. The slowdown in real GDP growth in Q1 is mainly due to a reduction in private investment in inventories (especially in wholesale trade and manufacturing) and a slowdown in non-residential investment in fixed assets. The annual growth rate of the personal consumption expenditure (PCE) index, which is the primary indicator of inflation, increased by 4.2%, compared to 3.9% in the fourth quarter. Excluding food and energy prices, the PCE price index increased by 5.0% in Q1 compared to 4.4% in Q4.


The outlook for the global economy predicts further weakening this year. The global economy is projected to grow by around 2.3% in 2023. In 2024, growth will accelerate only slightly to 2.6%.

Global supply chains function more easily. This has helped some key markets, such as automotive, but for the most part, the easing of supply chain pressures has come as general demand for goods has subsided, bringing down traffic volumes. Export demand has weakened, which can be explained to some extent by factors such as inflation and consumers turning inward towards domestic enterprises and services (before goods). Global trade growth will be below overall economic growth this year before a slight rebound in 2024.

Monetary policy efforts around the world continue to aggressively target inflation. The pressure persists and some areas turn out to be sticky. However, as it shakes, global inflation is falling, albeit stubbornly. After 8.1% in 2022, inflation growth will decelerate to 5.9% in 2023 and further to 4.2% in 2024. By the end of 2031, global inflation is expected to stabilize to an average increase of only 3%.

Global manufacturing activity has slowed markedly from 2.9% in 2022 and will only grow by 0.3% in 2023. Manufacturers are reducing inventories in many sectors. Weaker demand for goods will accelerate the flow of new orders for production. Higher interest rates will discourage new investment and demand for related materials, especially in interest-sensitive end-use markets such as construction. Forecasts predict some variation in production results across sectors and regions. Manufacturers in the car supply chain will benefit from the transformation taking place in this sector.


Oil prices rose slightly this week on the back of an unexpectedly large drop in US oil inventories. US natural gas prices changed little during the week. European gas prices fell to their lowest levels in two years on weak demand expectations, especially from the industrial sector. The total number of oil and gas platforms fell for the third week, by 11 to 716, lower than a year ago. After peaking late last year (782 in early December), the number of platforms is declining.

05-26-23-Chemicals Summary

According to data published by the Association of American Railroads, in the week ending May 20, there was a slight increase (by 211 wagons) of chemical loads in wagons, to 31,588. Loads decreased by 4.9% y/y (13-week average), decreased by 5 .2% YTD/YTD and up for 7 of the last 13 weeks.

The US Geological Survey reported that the monthly production of soda ash in March amounted to 868 thousand. tonnes, which means an increase in relation to the previous month by 4.5% and a decrease by 11.7% y/y. Inventories fell by 25.2% to 231,000. tons at the end of the month, which is an 8-day supply. Closing inventories fell by 18.9% y/y.

05-26-23-Production of soda ash

The US Regional Chemical Production Index (US CPRI) ACC rose 0.5% in April. The index is measured against a three-month moving average (3MMA) to reduce month-to-month volatility. The profit in April reflects the gradual improvement in several chemicals, especially those recovering from production shutdowns in the first quarter. Inventories moved into a more balanced position in the second quarter, and despite a slowdown in production rates, several end-use markets improved, most notably motor vehicle production. U.S. chemical production was higher than a month ago across all regions, with the biggest increase in the Gulf Coast, which largely recovered from some production shutdowns in the first quarter. However, production remained lower than last year. The production of fertilizers, consumer products, organic chemicals, plastic resins and inorganic chemicals showed an upward trend. These gains were offset by lower production of synthetic rubber, paints and coatings, adhesives and other specialty chemicals. The production of the fibers produced was generally flat.

05-26-23-Global CPRI

According to data collected by the ACC, the Global Chemical Production Index (CPRI) increased by 0.4%(e) in April. The increase followed an increase of 1.6%(y) in March. Like the US CPRI, the global CPRI is measured using a seasonally adjusted 3-month moving average. Chemical production was higher in all regions except South America. The largest increases in April were recorded in the countries of the former Soviet Union (+0.8%) and Africa and the Middle East (+0.5%). Production in the Asia-Pacific region increased by 0.4%, of which chemical production in China increased by 0.6%. Within the segments, the largest gains were recorded in synthetic materials (0.6%) and coatings (+0.6%). Additional details on global CPRI will be available to members on ACCExchange next week or email David_lan@americanchemistry.com to be added to the CPRI Global Report Distribution List.

Note on color codes

The colors of the banners represent observations about current conditions across the economy and business chemistry. For the entire economy, we keep a current list of 20 indicators. The color of the banner for the macroeconomic section is determined as follows:

Green – 13 or more positives
Yellow – 8 to 12 positives
Red – 7 or less positives

Fewer indicators are available for the chemical industry. As a result, we rely on an assessment of whether production in the industry (defined as chemicals excluding pharmaceuticals) has increased or decreased for three consecutive months.

For more information

ACC members can access additional data, economic analysis, presentations, forecasts and weekly economic updates via ACCexchange.

In addition to this weekly report, ACC offers a wealth of other economic data that includes world production, trade, supplies, inventories, price indices, energy, employment, investment, research and development, health and safety, financial performance indicators, macroeconomic data and much more. To order please visit http://store.americanchemistry.com/.

Every effort has been made in the preparation of this weekly report to provide the best information and analysis available. However, neither the American Chemistry Council nor any of its employees, agents or other assigns makes any warranties, express or implied, and assumes no liability for any use or the results of such use of any information or data disclosed in this material.

Please contact us at ACC_EconomicsDepartment@americanchemistry.com.

about the author

American Chemistry Council

American Chemistry Council

The American Chemistry Council (ACC) represents the leading companies involved in the multi-billion dollar chemical business. ACC members use the science of chemistry to create innovative products, technologies and services that make people’s lives better, healthier and safer. ACC is committed to improving environmental, health and safety performance through its Responsible CareĀ® program; common sense advocacy on major public policy issues; and health and environmental research and product testing. ACC members and chemical companies are among the largest investors in research and development and develop products, processes and technologies to combat climate change, improve air and water quality and advance towards a more sustainable and circular economy.

Source link

Leave a Comment