According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on May 5, 2023, chemical railcar loadings were down 1.3% to 33,864 for the week ending 29 April. Loadings were down 4.9% Y/Y (13-week MA), down 6.0% YTD/YTD and have been on the rise for 8 of the last 13 weeks according to data released by the Association of American Railroads.
Details of the ISM Manufacturing PMI® report suggest the chemical industry activity continued to contract through March. New orders, new exports orders and production were down in April while employment increased. Chemical manufacturers have been working off order backlogs and working down inventories. Supplier deliveries have been faster, reflecting reduced supply chain pressures. Inflationary pressures have eased as well as chemical manufacturers report declining input/raw material costs.
Chemical shipments moved slightly higher for a second month in March, up by 0.2%. Gains in shipments of agricultural chemicals offset lower shipments of coatings, adhesives, and other chemicals. Chemical inventories eased by 0.1% as lower inventories of coatings, adhesives, and other chemicals offset higher inventories of agricultural chemicals. The inventories-to-shipments ratio eased from 1.37 in February to 1.36 in March. This level was higher than a year ago (1.32) but lower than its recent peak of 1.42 in November 2022. Chemical shipments were off 1.3% Y/Y while inventories were up 2.3% Y/Y.
ACC reported that production of major plastic resins in North America totaled 8.5 billion pounds in March 2023, a level up 12.5% M/M and up 2.7% Y/Y. Year-to-date production was 24.1 billion pounds, 1.6% higher than the same period in 2022. Sales and captive (internal) use of major plastic resins totaled 8.0 billion pounds, up 8.1% M/M but down 7.0% Y/Y. Year-to-date sales and captive use were 23.2 billion pounds, a 1.2% decrease compared to the same time last year.
Chemical industry construction spending rose 0.6% in March and was up 21.6% Y/Y. Chemical construction spending as a percent of total manufacturing construction spending was 22.2% in March. The comparison has been softening gradually after climbing to a sustained high proportion (around 46%) during 2014-2017.
Chemical and pharmaceutical industry employment rebounded by 2,000 (0.2%) in April. The number of production workers rose by 6,300 while the number of supervisory and non-production workers fell by 4,300. Compared to a year ago, industry employment was up by 17,200 (2.3% Y/Y). Average hourly wages were up 6.2% Y/Y. The average workweek increased by 12 minutes to 41.5 hours. With the higher number of production workers and a slightly longer workweek, the labor input into the chemical industry rose 1.4% from March, suggesting that output rose. This is in contrast to the ISM Manufacturing PMI® report that suggested chemical production contracted in April.
The U.S. Geological Survey reported that monthly production of soda ash in February was 831 thousand tons, down 6.0% compared to the previous month and down 2.8% Y/Y. Stocks fell 2.6% compared to January to 295 thousand tons at the end of the month, a 10-day supply. Ending stocks were up 15.2% Y/Y.
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.
