The economic reports this week were mixed with several reports coming in weaker than expected. The trade deficit expanded and construction spending barely moved while light vehicle sales slipped. The ISM report suggests that the industrial sector continues to grow but at a slower pace. It’s possible that some of the slowdown was due to adverse weather conditions impacting businesses in December and January. Evidence from the non-manufacturing sector, however, suggests that this broad section of the economy is strengthening.
All eyes were on today’s employment report and it was slightly disappointing. On the one hand, the unemployment rate edged down reflecting stronger employment (rather than lower labor force participation). On the other hand, payroll growth was significantly weaker for the second straight month. As with other economic indicators mentioned above, unusually cold weather may bear some of the blame.
Turning overseas, global manufacturing continues to expand. And the semiconductor industry, an important market for chemistry, reached record levels last year and is poised to continue this momentum into 2014.
The details in the ISM manufacturing report indicate that the chemical industry contracted in January. The trend in railcar loadings appears to confirm this. Labor market input, however, suggests modestly higher production during the month. Overall industry employment rose during January, led by gains in production worker employment. Our running tab of shale-induced projects stands at 148, representing a cumulative investment of $100.2 billion. Recent job gains reflect this new paradigm.
Our running tab of positive slipped to 14 out of 20 this week. Thus, we continue to post a green banner. For the business of chemistry, the indicators continue to bring to mind a green banner for basic and specialty chemicals.