According to the "Metal Industry Indicators" report released by the US Geological Survey (USGS), the steel leading index for the US increased by 1.2 percent in July this year, the latest month for which it is available, to 113 from a revised 111.7 in June. Its six-month smoothed growth rate increased to four percent from a revised 2.5 percent in June.
Most of the steel index' components increased, with the largest positive contribution coming from a rise in the inflation-adjusted M2 money supply growth rate. A rebound in new orders for iron and steel products also made a strong positive contribution to the leading index. However, a more than one-hour shorter average work-week in iron and steel plants and the falling PMI held the leading index back.
The steel leading index growth rate remains above the threshold that indicates growth in the US steel industry; nevertheless, advance data such as the August PMI and the S&P stock price index for iron and steel companies suggest that steel industry growth could slow in the near term.
* Composite coincident indexes for the metal industries consist of indicators for production, shipments, and total employee hours worked.