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July 2020 Insight Guide: Market Indicators

The Economy

As COVID-19 continues to spread in the U.S., Goldman Sachs revised its GDP expectation for the third quarter. The bank now sees GDP growing 25%, down from the original expectation of 33%. The bank also sees total economic contraction worsening to 4.6% from 4.2%. This is largely due to slower-than-expected recovery in consumer spending.

American businesses added 4.8 million jobs in June, the second straight month of job additions amid the coronavirus pandemic. The unemployment rate came in at 11.1%, lower than the expected 12.5% and down from May’s reading of 13.3%.

Key Indicators

For the third consecutive month architecture firms saw their billings decrease. The May score of 32.0 was somewhat higher than that of April, but any score below 50 indicates a decline in firm billings.

The June Purchasing Managers Index registered 52.6%, up 9.5 points from the May reading of 43.1%. A PMI above 50 indicates expansion when compared to the previous month.

The Consumer Confidence Index increased to 98.1 in June, up from May’s reading of 85.9. This is still well below pre-pandemic levels, but the slow reopening of the economy and improvement in unemployment helped improve consumer’s views of the current conditions.

The Steel Industry

U.S. steel imports tumbled in May, down 35.5% from the previous month to roughly 1.79 million net tons. The decline reflects the impacts of the coronavirus pandemic and the 25% tariff on steel imports. Finished steel imports, however, rose to 13.2%.

On June 22, the Supreme Court said they would not hear the appeal for a case brought by the American Institute for International Steel. The case would challenge President Trump’s authority to increase steel tariffs. The American Iron and Steel Institute praised the Supreme Court’s decision, saying “This lawsuit by steel importers was a weak attempt to mask the fact that surging foreign imports have severely impacted the domestic steel industry and threaten our national and economic security.”

For more information, view the July 2020 Market Insight Guide below or contact your local sales representative.

Metalwest Market Insight - July 2020
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June 2020 Insight Guide: Market Indicators

The Economy

The U.S. economy added 2.5 million jobs in May, a surprising jump as businesses across the nation began to reopen from the COVID-19 shutdown. The unemployment rate fell to 13.3%; this is still high by historical standards, but much better than expected and still an improvement over April’s jobless rate of 14.7%.

With restrictions due to COVID-19 gradually being lifted on state by state basis, officials are looking for signs of an economic rebound. However, so far the rebound remains slow. Information collected by Goldman Sachs and the New York Federal Reserve showed the economy continuing near bottom with no sign of further decline, but no clear upward trend yet either.

Key Indicators

The Architectural Billings Index fell again in April, following the large decline in March. The ABI registered at 29.3, a new all-time low for the index.

The May Purchasing Managers Index registered at 43.1%, up 1.6 points from April’s reading. This indicates expansion in the overall economy after April’s contraction. The New Orders Index registered at 31.8%, an increase of 4.7 points from April’s reading of 27.1%. The Production Index registered at 33.2%, up 5.7 points compared to April.

The Consumer Confidence Index held steady in May, following a rather sharp decline in April. The index registered at 86.6, up from 85.7 in April. Short-term expectations moderately increased as the gradual re-opening of the economy helped improved consumers’ spirits. However, consumers remain concerned about their financial statuses.

The Steel Industry

Due to the effects of the COVID-19 pandemic lockdown, global steel demand is expected to decrease by 6.40% year on year in 2020 according to the World Steel Association. They expect steel demand to drop by 1.65 billion tonnes for June 2020, but to recover to 1.72 billion tonnes in 2021.

U.S. energy firms cut the number of oil and natural gas rigs operating to a record low of 301 in the week to May 29. Analysts expect U.S. firms to continue chopping rigs for the rest of the year and the count will remain low in 2021 and 2022.

Contact your local sales representative to learn more.

Metalwest Market Insight - June 2020
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May 2020 Insight Guide: Market Indicators

The Economy

The U.S. economy cut a record 20.5 million jobs in April, while the unemployment rate climbed to 14.7%, as the coronavirus pandemic forced businesses across the U.S. to temporarily shut down and lay off workers.

Key Indicators

The Architectural Billings Index fell by 20.1 points to a score of 33.3 for the month of March. This is the largest single-month decline in the index’s 25-year history. A score below 50 indicates a decline in billings.

The April Purchasing Managers Index registered at 41.5%, down 7.6 points from March. The New Orders Index registered 27.1%, a decrease of 15.1 points from the previous month. The Production Index fell 20.2 points to 27.5% for March.

The energy market evaporated in late March and April, as demand dropped more than 30%, domestic supply peak, and Saudi Arabia and Russia decided to engage in an oil price war. The result collapsed oil prices and sent West Texas Intermediate oil prices negative for the first time in history on April 20th, as traders couldn’t find storage for the produced oil and had to pay buyers to take it.

The Steel Industry

COVID-19 has had an undeniably large impact on commodities markets, including the ferrous supply chain. The most significant impact is the increasing disarray in price correlations between various segments of the ferrous supply chain after the COVID-19 pandemic began. To learn more about COVID-19’s impact on the steel industry, view the Market Insight Guide below.

Contact your local sales representative to learn more.

Metalwest Market Insight - May 2020