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October 2020 Insight Guide: Market Indicators

The Economy

The number of Americans filing new claims for unemployment fell last week, but still remained at recession levels. Personal income dropped in August, emphasizing the need for another relief package for businesses and the unemployed.

The U.S. economy added 661,000 jobs in September, while the unemployment rate ticked down to 7.9%. While this is a modest improvement, the economy is far from recuperating the jobs lost during March and April.

Key Indicators

The Architecture Billings Index remained at 40 for the third consecutive month, showing business conditions still stalled at architecture firms. While fewer firms reported declining billings in August than during early months of the pandemic, an index score below 50 still indicates a decline in billings.

The September Purchasing Managers Index registered at 55.4%, down 0.6 points from the August reading of 56%. The figure indicates expansion in the overall economy for the fifth month in a row, as a score above 50 represents expansion. The New Orders Index registered at 60.2%, down 7.4 points from August. The Production Index registered at 61%, down 2.3 points from the previous month.

Industry News

Iron-ore supplier Cleveland-Cliffs is morphing into a steel giant. Cliffs plans to buy the U.S. assets of ArcelorMittal. The transaction could make Cliffs the second largest U.S. steelmaker, with about 17 million tons of capacity. This could bail out the the U.S. steel industry from a looming capacity issue. This would bring the number of significant U.S. suppliers from five to four; fewer producers means they have more control over supply. In theory, this should mean more stability in commodity prices and more profitability.

For more information, view the October 2020 Metalwest Market Insight Guide below or contact your local sales rep.

Metalwest Market Insight - October 2020
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September 2020 Insight: Market Indicators

The Economy

The U.S. economy plunged at an annual rate of 31.7% during the second quarter under the weight of the coronavirus pandemic. This is the sharpest quarterly drop on record, the previous worst drop was a 10% loss in 1958. A hiring bounce-back in June suggested that the economy began to recover. However, economists say a full recovery is still far off as the virus has yet to be contained.

Unemployment in the U.S. fell to 8.4% as the economy added 1.4 million jobs in August. While August’s payroll gains were healthy, it still marks the second straight monthly slowdown in hiring after a record 4.8 million positions were added in June.

Key Indicators

The Architecture Billings Index registered a score of 40 in July, unchanged from June, as a majority of architecture firms continue to report a decline in their firm’s billings. A score below 50 indicates a decline in billings.

However, the Purchasing Managers Index saw a 1.8 percentage point increase in August with a reading of 56%. This indicates expansion in the overall economy for the fourth consecutive month. The New Orders Index increased 6.1 points to 67.6% in August and the Production Index increased 1.2 points to 63.3% compared to July.

The Consumer Confidence Index decreased in August after also declining in July. The Index now stands at 84.8. However, consumer spending has rebounded in recent months.

The Steel Industry

The Trump administration is working to curb steel imports from Brazil and Mexico, boosting protections for battered U.S. steelmakers and jobs in the election battleground states of Pennsylvania, Ohio, and Michigan. The U.S. Trade Representative’s office said it was reducing Brazil’s remaining semi-finished steel imports quota for 2020 in light of recent deterioration in market conditions due to COVID-19. Mexico also agreed to establish a strict monitoring regime to address surges of exports to the U.S.

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

Metalwest Market Insight - September 2020
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August 2020 Insight Guide: Market Indicators

The Economy

With the COVID-19 pandemic causing weeks of record job losses and an unemployment rate not seen since the Great Depression, has the U.S. economy seen the bottom? According to Forbes, the leading economic indicators they track signal yes; the shortest recession in history is over. However, three components are necessary for a durable recovery: broad-based confidence (consumer, business, and investory) to drive the economy forward, green shoots (signs beneath the surface that economic expansion is beginning to take hold), and the alleviation of significant financial stress.

This doesn’t mean that the U.S. economy isn’t still fragile. Recovery may be hard and long.

The U.S. economy regained fewer jobs in July, adding 1.8 million payrolls, after a record gain in June of 4.8 million jobs.

Key Indicators

The June Architecture Billings Index registered at 40.0. This is up over last month, but still below 50 meaning that most design firms still saw their billings decline. Any score below 50 indicates a decline in billings.

The July Purchasing Managers Index registered 54.2%, up 1.6 points from June. This figure indicates expansion in the overall economy for the third month in a row. The New Orders Index registered at 61.5%, up from the June reading of 56.4%. The Production Index registered at 62.1%, up 4.8 points from the previous month.

The Consumer Confidence Index decreased in July to 92.6 after increasing to 98.3 in June. The Present Situation Index improved from 86.7 to 94.2 in July. However, the Expectations Index decreased from 106.1 in June to 91.5 this month.

The Steel Industry

After the COVID-19 pandemic gutted steel demand, finished steel exports plunged 26.2% in the first half of 2020. The U.S. imported 1.39 million tons in in June, down 23% compared to May; finished steel imports fell 12.7% to 1.31 million tons.

Section 232 tariffs on steel and aluminum imports are likely to stay after the U.S. presidential election. The tariffs would be difficult to unwind no matter who wins the election, according to a top executive at ArcelorMittal.

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

Metalwest Market Insight - August 2020