STEEL FRAMING ALLIANCE | FRAMEWORK ONLINE
April 1, 2009
MARKETPLACE
 
Signs of life seen in steel

HAMMOND — Steel production currently is the lowest it's been since the Great Depression, yet there are still enough signs of life in the economy that indicate the United States will survive "The Great Recession."

ArcelorMittal President and CEO Mike Rippey pulled no punches with Lakeshore Chamber of Commerce attendees during their monthly luncheon Wednesday: The steel industry is operating at 40 percent capacity, and ArcelorMittal has laid off many employees with no firm date as to when they can come back. Last year, steel was running at 91 percent capacity until September.

At the same time, manufacturing capacity is around 67.4 percent at this point; the housing market has nearly a year of inventory it would need to sell before starting to build again; and the auto industry has at least 100 days of inventory on its hands.

While those statistics might sound dire at face value, they're not, at least where the various inventories are concerned, according to Rippey. For example, reserve steel inventories are lower than they've been, but once they're depleted, people will have to come and make more.

"There might be 100 days of inventory in auto showrooms, but there's only 2.2 million units out there; last year, there was 2.8 million. The sales base is low," he said. "The supply chains have been leaned up like I've never seen before."

As well, lower energy costs are already acting like tax credits, and the dollar is weakening again, which is good for manufacturing. The Fed keeping interest rates low is also the "absolute correct thing to do" right now, because people aren't likely to make the same mistakes again.

"We held the rates low in 2001, but perhaps by doing so we exacerbated the bubble since prices ran like crazy in 2003-2004," Rippey said.

When Rippey asked groups to which he spoke back in December whether they were in the market for big-ticket items like cars or appliances, no one raised their hands, he said. Wednesday, a smattering did, and for that he's extremely hopeful.

"I don't think it's anyone's desire to not complete the American dream. We need liquidity, and we need consumer confidence," he said. "Don't be afraid to buy that car until the crisis abates, or nothing will be restored."

Rippey was asked what the effect of global warming will have on the industry. He said the United States has reduced its carbon output 29 percent overall but balked at the cap and trade legislation being considered since it can work only if every country globally buys into it.

Source: Gary Post Tribune, March 26, 2009


Next Article >>

 

HEADQUARTERS
 

Steel Framing Alliance
1201 15th St., NW,
Suite 320
Washington, D.C. 20005
Phone 202.785.2022
Fax 202.785.3856

 
NEW MEMBERS
- Asterisk Consulting Inc.
San Francisco, CA
- Bob D. Campbell & Co., Inc.
Kansas City, MO
-
BSE Structural Engineers
Lenexa, KS
-
Clinton Woodward – NMSU
Las Cruces, NM
- Cornerstone Marketing Grp
Delta, BC
-
Draper Aden Associates
Richmond, VA
- ISAT
Fremont, CA
- James Williams
Webster, TX
- Key Architecture
Rohnert Park, CA
- Posner Engineering Inc.
Keller, TX
- Private Design Professional
Chestertown, MD
- R4 Engineering, PLLC
Lebanon, TN
- Rentz Engineering Design
Waycross, GA
- Stanley-Bostitch
East Greenwich, RI
- TLCP Structural
Phoenix, AZ
 
UPCOMING EVENTS
April 20, 2009
Construction Solutions with Cold-formed Steel, Structural Engineers Coalition of Connecticut Cromwell, CT More
 
 

April 21, 2009
Construction Solutions with Cold-formed Steel, Structural Engineers Association of Massachusetts

 
 

April 22-23, 2009
Steel Doing it Right
Buffalo, NY More

 
 

May 8-10, 2009
National Home Builders Association Green Building Conference - The Green of Green Dallas, TX More

 
 

May 20-21, 2009
California Steel Framing Forum and 2009 CFSEI Annual Conference Anaheim, CA More

 

 


 
 


 
 


Become a Member | Unsubscribe

Brought to you by the Steel Framing Alliance (SFA) on the first Wednesday of each month, Framework Online arms you with the latest news and commentary on the steel framing and construction industries. In addition to industry headlines, trends and project profiles, Framework Online provides information and ideas that will better enable members to increase their participation in the residential and commercial construction markets.