According to the Metal Industry Indicators report released by the US Geological Survey (USGS), an upturn in US metals industry activity might be slower than earlier data indicated. The US economic recovery has been supporting domestic primary metals industry activity with modest metals demand from the manufacturing and construction sectors in the first quarter of 2013, though recent data indicate that these sectors are decreasing their metals consumption. Moreover, slower global economic growth continues to lower demand for metals and metal products produced in the US.
The steel leading index for the US decreased 0.1 percent in February this year, the latest month for which it is available, to 112.0, from a revised 112.1 in January. Its six-month smoothed growth rate decreased to three percent from a revised 3.3 percent.
The USGS report points out that the steel leading index growth rate has generally moved higher since July 2012 and normally this would suggest that an upturn in US steel industry activity could take place soon. However, slower manufacturing growth in the United States and globally could slow down a recovery in the steel industry.
Note: Composite coincident indexes for the metal industries consist of indicators for production, shipments, and total employee hours worked. A growth rate above +1.0 percent is usually a sign of an upward near-term trend for future metals activity, while a growth rate below -1.0 percent indicates a downward trend.
