USA Index of Activity in Steel-Consuming industries
WSD's 16-component weighted index (IDX) of activity in steel-consuming industries, that's used to track changes in steel demand, is up 2% for the first eight months of 2016 on a year-to-year basis. The composite year-to-year components of IDX include: The short-lead-time capital goods index down 4.4%; the long-lead-time capital goods index up 9.3%, including a 13.2% gain in non-residential construction; and the consumer goods index up 7.6% include a 9.8% increase in automotive production.
Steel consumption per point of IDX - i.e. steel intensity - has been declining in recent years in part because: a) some price inflation creeps into the government's unit production indices as the government adjusts the figures for gains in product quality (such as safer and more fuel efficient cars); and b) when the economy expands at a slower rate, services account for a large share of the overall growth. Interestingly, since 2006, USA automotive production has risen 11 percent to about 12 million units annually; yet, the Bureau of Labor Statistic's producer price index for automotive increased 14 percent.
