Global and U.S. Chemical Production Trended Higher in April

WASHINGTON (May 31, 2023) - Marking another month of incremental gains, Global and U.S. chemical production rose in April. According to the American Chemistry Council (ACC), the Global Chemical Production Regional Index (Global CPRI) rose by 0.4% in April following a revised 1.5 % increase in March. In the U.S., the U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.5% in April. Both indices are measured on a three-month moving average (3MMA) basis to reduce month-to-month volatility.

"Chemical output increased in April for all regions except South America," said Martha Moore, ACC's chief economist. "On a year-over-year basis, while global production remained lower compared to a year ago, output was higher in Europe, Asia Pacific, and Africa & Middle East."

In the U.S., April's gain reflects improvement across several chemistries, especially those recovering from production outages during Q1 due to bad weather and maintenance to refineries.

"Going into Q2, inventories have moved into a more balanced position, and despite slowing momentum in manufacturing, several end-use markets have improved, in particular, motor vehicle production," Moore explained. "A recent ACC analysis showed that an average vehicle contains more than $4,000 of chemistry products."

Key findings:

• The gain in April reflects higher chemical production in several major producing countries, including the United States, China, Taiwan, Russia, France, and Germany.
• Global output is up in all segments except Agricultural Chemicals, which include pesticides and fertilizers.
• Output in the U.S. was higher than a month ago in all regions, with the largest gain in the Gulf Coast, which has largely recovered after some production outages during Q1. Output remained lower than a year ago, however.
• In the U.S., output of fertilizers, consumer products, organic chemicals, plastic resins, and inorganic chemicals trended higher. These gains were offset by lower production of synthetic rubber, paints & coatings, adhesives, and other specialty chemicals. Production of manufactured fibers was essentially flat.

The Global CPRI measures the production volume of the chemical industry for 55 key nations, sub-regions, and regions, all aggregated to the world total. While most data are seasonally adjusted at source, some are adjusted using the U.S. Census Bureau's X-12 model to present data comparable to the United States. In a few cases, ACC creates indices of production based on actual production data weighted according to industry structure. The index uses the total value added as a proxy for individual country weights to arrive at the total. This method accounts for the changes in each country's share relative to global production, which is more reflective of the ever-changing global production dynamics. The Global CPRI measures production activity generally consistent with the overall industry nomenclature of NAICS 325 (less pharmaceuticals) and the EU NACE 20 industries. The index measures the production of soaps and detergents, personal care products, fertilizers, and other downstream products in addition to measuring inorganic chemicals, organic chemicals, plastic resins, synthetic fibers, synthetic rubber, adhesives and sealants, coatings, and other specialty chemicals. Production of pharmaceuticals is excluded.

The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. The U.S. CPRI includes the most recent Federal Reserve benchmark revision released on March 28, 2023. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. The reading in March reflects production activity during February, March, and April.