October 26, 2017 – The Chemical Activity Barometer (CAB) is a composite index, which is comprised of indicators drawn from a range of chemicals and sectors, including chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals. It has been shown to provide a lead of 2 to 14 months, with an average lead of 8 months at cycle peaks as determined by the National Bureau of Economic Research.
The CAB grew 0.7% in September to 118.62 compared to August’s revised reading of 117.77. Year-over-year from last September is up 3.2%. The 3 month moving average saw an increase of 0.2% from the month before and is up 3.0% from the year before.
Even though monthly CAB readings can be volatile, the three-month moving average still shows strong growth. The growth in September continues the long run trend since 2009. Due to the connection of CAB and industrial production, an increase in the CAB reading provides us with a general direction of industrial production as well as other economic trends.