Final Thoughts: The hidden cost of analysis paralysis in the age of uncertainty

Confusion around President Donald Trump’s beefed-up Section 232 measures has been called out as the reason why buyers are cautious about purchasing steel. Some of the questions being asked are: Will the rates on steel stand by the time the imported steel gets to shore if the president makes a deal with the country of origin while the boat is on the water? Is buying domestic steel at its current cost an overspend if tariff deals cover comparable products? What happens if a country receives a carve-out? What happens if the president allows for tariff-rate quotas (TRQs)?

Many cite high interest rates as another reason why projects that might consume large amounts of steel are on hold. New building projects tend to stall when the market becomes cost prohibitive. Such is the case when borrowers must pay more for the money they need to develop or make purchases.  

Tariffs and interest rates are certainly at the foundation of current market conditions. However, different pockets of the US are experiencing varying types of considerations in addition to these fundamental factors.  

Market data

The Federal Reserve’s Beige Book reported that overall, the US economy did experience a slight expansion in August. Published earlier this month, the report assesses the conditions of its 12 regions during the prior six-week period. They publish this assessment eight times per year, and this month’s report period ran through Aug. 25.

The general takeaway for overall economic health showed that the US economy inched up, as six regions saw economic growth, two remained the same as the previous six-week period, and four experienced economic contraction.  

All regions noticed price increases driven by tariffs. While rising costs from reciprocal tariffs don’t have a direct impact on steel prices, the cost of day-to-day operations experiences upward pressure and causes more squeeze for businesses. If buyers aren’t consistent, contracts are slow, interest rates challenge new projects, and the cost of doing business increases, the existential threat to small enterprises becomes quite real.  

The Fed’s report highlighted employers stalling hiring. The takeaway is that uncertainty and weak demand have been weighing on the minds of firms when it comes to taking on new help. Return-to-work policies and automation, like AI tools, caused some losses in headcount.

The job market’s decline, viewed from a macroeconomic decision-making perspective rather than a personal one, may encourage advocates for lowering interest rates.

A weaker job market helps ensure that lowering interest rates will not cause the great economic four-letter word, stagflation.  

On Friday, the Bureau of Labor Statistics reported only 22,000 new US jobs were added in August, far less than the expected 75,000. Since then, the bureau has adjusted its benchmarks, which did nothing to alter the fact that the job market remains soft.  

As such, the case for lowering interest rates becomes more compelling.

Will lower rates spur more project starts and begin increasing demand for steel materials? Seasonally, construction projects typically slow down in many US regions experiencing winter weather conditions, such as frozen ground. Perhaps favorable market conditions (tariff rates locked and lower interest rates spurred on by the latest economic data) will lead to more inked contracts that increase steel product demand into next year. 

ISM Chicago’s latest report highlights that gains made in the Chicago Business Barometer in July were nearly wiped out in August. The index fell 5.6 points to 41.5 in August, marking the 21st month the index has been in contraction below 50.  

The Barometer noted that new orders have pulled back, and that employment, production, and order backlogs have dropped. When survey respondents were asked, in light of policy uncertainty, when they expect certainty around input prices, 23% responded within three months, 31% said within three to six months, 23% said six months or more, and 23% had no idea.

According to the same report, the employment index fell 5.9 points, unwinding an 8.3-point increase the previous month and falling to its lowest point since June 2020.

Factored in with the US Labor Bureau’s statistics, the case that lowering interest rates would not result in stagflation becomes more compelling.  

The Dodge Momentum Index report for July looked promising. The index jumped 20.8% from June and was up 27% year-to-date. During the 2025 SMU Steel Summit, Timna Tanners, the managing director of equity research at Wells Fargo, said the 50% tariffs are a strong deterrent for steel imports, ultimately protecting the domestic steel industry. Coupled with a promising July report from Dodge, the outlook for the US domestic steel market could look quite strong.

Dodge Construction Network issues its data each month and hasn’t published its results for August at the time of this publication. However, if the data unravels in August, that might result in even more evidence for a federal interest rate cut. But what if the August data demonstrates that new projects are underway and that current interest rates are not hindering developers who are investing in large AI data warehouses?  

Moving ahead

During the 2025 SMU Steel Summit, Barry Zekelman, the executive chairman and CEO of Zekelman Industries, said his business is moving forward despite choppy waters.  

“There’ve been up and downs with what’s going on with tariffs and all the trade fights that are happening. But we’re looking at the long game, which is what we’re playing. We’re concentrating on execution,” Zekelman said.  

Right now, data points are scattered, with a wide range of circumstances, depending on factors such as geographic region. With so much varied information to consider, is the long-term view the only way to spur demand and get the steel market moving?

While the Fed weighs data on a possible rate cut and the president negotiates tariffs, does the steel market move forward with a long view? As business costs rise, time spent on analysis over execution may become the ultimate cost of inaction in uncertain times.

Businesses struggling to make a move risk being usurped by those in execution or planning mode.

Steel Dynamics Inc. (SDI) President and Chief Operating Officer Barry Schneider told the audience at Summit, “Oftentimes, you know, I tell our teams, when you have a great market and capitalize on it, it is because you made really good decisions when it wasn’t great.”

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