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American chemical production — which was already weakened before the impact of COVID-19 set in — had a significant decline in output in April, according to the American Chemistry Council (ACC).
The ACC’s monthly U.S. Production Regional Index showed that April output fell 3.1% from March, accelerating downward after a 1.0% month-to-month decline in March and a 0.4% decrease in February.
That decline is even bigger year-over-year, as April’s was down 5.3% from a year earlier — marking the 11th-straight month of decline and the largest decline so far. Output was down year-over-year across all regions: Northeast was down 7.0% (-3.1% from March); Mid-Atlantic down 7.0% (-3.1%); West Coast down 6.9% (-3.0%); Ohio Valley down 6.5% (-3.2%); Southeast down 6.0% (-3.1%); Midwest down 5.9% (-3.0%); and Gulf Coast down 3.9% (-3.3%).
The ACC said chemical production fell across all product segments, though the output of certain materials increased within several major segments, including those related to personal protective equipment and sanitation products.
The Council noted that some form of chemistry is used in the production of almost all manufactured goods, which means overall manufacturing activity largely drives demand for chemicals. Nationwide factory closures throughout April led to a 6.3% decline in overall U.S. manufacturing activity on a three-month-basis.
This correlates with the Institute for Supply Management’s monthly Purchasing Managers Index — widely regarded as a reliable barometer of the health of U.S. manufacturing — plunging to a reading of 41.5 in April, down from 49.1 in March. Anything below 50 indicates industry contraction.
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