According to the Metal Industry Indicators report released by the US Geological Survey (USGS), the US economic recovery is supporting the growth of activity in the primary metals industry with modest metals demand from the manufacturing and construction sectors. However, slower economic growth in Asia and Europe has resulted in reduced demand for US metals. The steel leading index for the US increased by 0.1 percent in October 2012, the latest month for which it is available, rising to 109.9 from a revised 109.8 in September. Its six-month smoothed growth rate dropped to -1 percent from a revised -1.4 percent in September.
In November, the highest monthly volume of new orders for iron and steel products during the year had a positive impact on the steel leading index. In contrast, declining light truck and car sales and the fall in the index of new housing permits made a negative contribution to the leading index. The USGS report points out that, although the steel leading index growth rate has risen two months in a row, it still points to declines in US steel industry activity.
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.