According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on January 6, 2023, chemical railcar loadings fell over the last two weeks of 2022 to 25,174 for the week ending 31 December. Loadings were down 9.1% Y/Y (13-week MA), flat YTD/YTD and have been on the rise for six of the last 13 weeks, data released by the Association of American Railroads
Within the details of the ISM report, the chemical industry was reported to have contracted in December. There were contractions in inventories, new orders and new export orders, and production in December, but chemical products customers’ inventories were reported as being “too low” which bodes well for future production. There was no change in employment in December compared to November. Supplier deliveries were faster and inflationary pressures on raw materials eased. One chemical industry respondent noted that “Customer demand continues to be depressed. While 2023 pipeline is looking very positive, current demand is significantly down”.
Chemical industry employment (including pharmaceuticals) fell by 5,700 (0.6%) in December with a small gain in the number of production workers that was more than offset by a large decline in supervisory/non-production jobs. Compared to a year ago, chemical industry employment was higher by 31,000 (3.5%). Average hourly wages for production workers were up 5.1% Y/Y, a slower pace than November’s upwardly revised 6.2% pace of wage gains. The average workweek for chemical industry workers rose by 6 minutes in December to 41.3 hours and the total labor input into the chemical industry was higher by 0.3% in December, in contrast again with the ISM report that suggested that the chemical industry output contracted.
Chemical industry construction spending edged up (by 0.2%) in November. Compared to a year ago, chemical construction spending was off by 26.6%. Chemical construction spending as a percent of total manufacturing construction spending was 19.3% in November. The comparison has been softening gradually after climbing to then sustaining a high proportion around 46% during 2014-2017.
U.S. production of major plastic resins totaled 7.2 billion pounds during November 2022, down 1.9% compared to the previous month, and down 5.4% Y/Y, according to ACC statistics. Year-to-date production was 85.3 billion pounds, up 2.6% Y/Y. Sales and captive use of major plastic resins increased 1.5% from October to 7.5 billion pounds and were down slightly (0.6%) Y/Y. Year-to-date sales were 85.1 billion pounds, up 4.2% Y/Y.
Chemical shipments continued to deflate in November, down by 1.1%. There were declines across all major categories. Chemical inventories also fell, down by 0.6%. Higher inventories of coatings and adhesives were offset by lower inventories of agricultural and other chemicals. As shipments fell faster than inventories, the inventories-to-shipments ratio moved higher from 1.41 in October to 1.42 in November. This was up from last November when the ratio was 1.28. Compared to a year ago, chemical shipments were off 2.5% while inventories were up 8.0%.
Note On the Color Codes
The banner colors represent observations about the current conditions in the overall economy and the business chemistry. For the overall economy we keep a running tab of 20 indicators. The banner color for the macroeconomic section is determined as follows:
Green – 13 or more positives
Yellow – between 8 and 12 positives
Red – 7 or fewer positives
For the chemical industry there are fewer indicators available. As a result we rely upon judgment whether production in the industry (defined as chemicals excluding pharmaceuticals) has increased or decreased three consecutive months.
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ACC_EconomicsDepartment@americanchemistry.com
American Chemistry Council
The American Chemistry Council (ACC) represents the leading companies engaged in the multibillion-dollar business of chemistry. ACC members apply the science of chemistry to make innovative products, technologies and services that make people's lives better, healthier and safer. ACC is committed to improved environmental, health, safety and security performance through Responsible Care®; common sense advocacy addressing major public policy issues; and health and environmental research and product testing. ACC members and chemistry companies are among the largest investors in research and development, and are advancing products, processes and technologies to address climate change, enhance air and water quality, and progress toward a more sustainable, circular economy.
