While service centers focus most of their
attention on customer needs and company operations, they
dont mind spending a little time spreading the word that
they play a significant role in the
broader U.S. economy.
A recent study commissioned by
the Rolling Meadows, Ill.-based Metals Service Center Institute
(MSCI) shows that the metal production and distribution
industry contributed more than $552 billion to the U.S. economy
in 2012, or more than 3.5 percent of the nations gross
MSCI president and chief executive officer M. Robert
Weidner III pointed to the results as validation for the
industry, which provides much-needed jobs. Our industry
and our members play an important role in our countrys
economy, he said. We need both local and national
elected leaders to pay attention to the issues and needs of the
metals industry for it to remain viable and for industry
executives to have the confidence to reinvest in and grow their
companies. The future strength of our country depends on
The study, conducted by John
Dunham & Associates Inc., New York, found that metal
producers and service centers directly or indirectly employ
nearly 2.5 million Americans who will earn approximately $151.4
billion annually in wages and benefits. Members of the industry
and their employees pay about $64.5 billion per year in
federal, state and local taxes.
One of the reasons we
commissioned the study (was) to be able to see exactly what the
metals industry means to the economy on both a local and
national scale, Weidner said. The numbers
dont lie: These are desperately needed jobs and economic
stimulation. Its vital that our elected leadership listen
to their constituents and act in the best interest of the
country and its people.
The study results are accessible
online in an interactive format that allow users to analyze the
data by congressional district. The MSCI hopes that its members
will show their elected leaders exactly how the businesses
impact their local communities, their states and the national
Not long before the release of
the study, President Obama delivered his fifth State of the
Union address, outlining a platform to expand U.S.
manufacturing. While Weidner said that the MSCI supports the
majority of the policies, several proposals outlined by the
President could have profoundly negative consequences for metal
producers, distributors and processors.
I was pleased that
President Obama made the concept of restoring U.S.
manufacturing the cornerstone of his remarks, Weidner
said. Our industry is gaining strengthÑjobs are
coming back and manufacturers are bringing operations back home
to the United States. Several of the initiatives proposed by
the President would increase hiring and promote
Specifically, Obama proposed
creating more manufacturing innovation centers, investing in
research and development and new training programs, and
ensuring a robust domestic energy supply.
But Weidner said that
Obamas call for higher taxes and his plan to combat
climate change through executive action may counterbalance his
The President said it is
lawmakers duty to restore the very American idea
that if you work hard and meet your responsibilities, you
can get ahead. He is right, Weidner said. But
lawmakers cannot restore that dream while taxing and regulating
job creators more. More than half of MSCI members are small
businesses that pay taxes at the individual income tax rate.
Through hard work, they have achieved the American Dream and
are trying to help others achieve it too. Making it more costly
for them to do business, to hire more workers and to provide
good benefits will not help us fulfill the generational
obligation the President so eloquently spoke of; it will drive
us further away from that goal.
The MSCI represents more than
400 companies in the industrial metals industry, and Weidner
said the institutes policy agenda offers alternatives for
lawmakers to consider.
The release of the jobs study
and the reaction to the presidents speech came as steel
distributors expectations for the first quarter remain
tempered due to a sluggish economy and an anemic pricing
U.S. and Canadian
distributors steel shipments fell about 5.6 percent in
February compared with January and also were down 7.9 percent
vs. February 2012, according to the MSCI.
February for us was down
20 percent from last year. Also, on a per-day shipping basis we
were down from January, a source at a Midwest sheet
And March isnt looking any
better, some steel market sources said.
Were not getting any
pull-aheads (in orders). Were not even getting requests
for quotes for the second quarter yet, which is surprising
since were almost there, the Great Lakes
distributor source said. Our customers are not feeling
the love that these steel mill increases will stick, regardless
of what scrap is doing.
There is not a real strong
pulse to the steel market, a source at an upper Great
Lakes flat-rolled distributor told AMM. February
was steady year over year but our shipments will be down in
March. That tells me demand is tepid.
New demand has been lacking, a
source at a large-volume steel plate distributor and processor
told AMM. We dont see anything happening
soon where it will turn around, she said. Customers
are not keeping inventory. They are shopping by the truckload
when they need it.
Service centers have reported
orders coming in from the automotive, agricultural equipment
and rail markets, but they noted that the construction market
is still moving slowly, as are small and mid-sized