“Davidson” submits:

The Chemical Activity Barometer (CAB) is a composite economic indicator. It is an indicator derived from data generated from all aspects of industrial, energy, import/export and consumer activity. In simple terms, this indicator captures economic activity spanning every sector of the US economy. After the sharp Oct-Dec 2018 decline in chemical company equities, which are a component of the CAB, this indicator is beginning to turn higher. Indicators representing employment, retail sales, and personal income forecast continued economic expansion. Economic indicators historically roll-over prior to recessions. There is no evidence of fundamental indicators rolling-over today.

The 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 first originated through a study of the relationship between the business cycles in the production of selected chemicals and cycles in the larger economy. Other specific indicators used include:

• Hours worked in chemicals;
• Chemical company stock data; publicly sourced, chemical price information;
• End-use (or customer) industry sales-to-inventories; and
• Several broader leading economic measures (building permits and ISM PMI new orders).

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