Steel Markets

Manufacturing and Construction Employment Slows in May
Written by Sandy Williams
June 7, 2019
Job growth in two industries vital to the steel industry, manufacturing and construction, showed signs of slowing in May.
The U.S. added a total of just 75,000 jobs in May, well below the 180,000 to 185,000 jobs forecast by economists. In addition, the Labor Department revised employment levels downward for March and April. The March data was reduced from 189,000 new jobs to 153,000 and the April data from 263,000 to 224,000, 75,000 less than previously reported and revising the three-month average to 151,000 job gains.
Manufacturing job creation, in particular, showed softening. The sector’s job growth was at its lowest level in two and a half years, with just 3,000 factory jobs added compared to 5,000 in April. Trade tensions were blamed for stifling investment and employment.
“There’s increasing evidence that the ongoing trade war here is beginning to have some tangible effects on the U.S. economy,” said Tim Quinlan, a senior economist at Wells Fargo Securities. “We’re not on the edge of the cliff here. But the pace of expansion in [manufacturing] is the slowest of the Trump era.”
The Alliance for American Manufacturing said the latest jobs report demonstrates that the economy is slowing and urged action on an infrastructure bill.
“Manufacturing job growth is clearly slowing,” said AAM President Scott Paul. “Economic expansions don’t last forever, but there are policy interventions that can boost demand and support new factory job creation. Now would be a good time to get a $2 trillion infrastructure plan back on track, and to secure a meaningful trade deal with China to rebalance that relationship.”
The construction sector added just 4,000 jobs in May after surging by 30,000 in April for the beginning of the construction season. Employment in the sector is up 3.0 percent over the past year, according to the latest analysis by the Associated General Contractors of America. Last month’s lower employment rate in construction is due more to a tight job market than softening demand, said AGC.
“The construction industry unemployment rate in May was even lower than for the overall economy,” said Ken Simonson, the association’s chief economist. “Even though average pay in construction is 10 percent higher than in the private sector as a whole, the number of job openings keeps climbing.”
Simonson noted that the unemployment rate for jobseekers who last worked in construction declined to 3.2 percent from 4.4 percent a year ago and the number of such workers decreased over the year from 415,000 to 294,000.
“Federal officials can help bring new workers into the construction industry so firms can keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “Funding more career and technical education programs is a proven way to expose more young adults to the many high-paying career opportunities available in this industry.”

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

AISI: Raw steel production bounces back
Domestic mill production rebounded last week, according to the latest production figures released by the American Iron and Steel Institute (AISI). Production had been historically strong over the summer months before softening in early October.

US sets Section 232 tariffs on trucks and buses
Medium- and heavy-duty trucks (MHDV) and buses imported to the US will start being charged Section 232 tariffs beginning Nov. 1.

Hot-rolled sources say demand continues to dwindle, prices feel arbitrary
Genuine demand, they stated, will return when the market feels stable again.

FabArc Steel Supply completes projects in Mississippi, Georgia
FabArc Steel Supply announced this week the completion of two large-scale projects in Georgia and Mississippi.

Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.