ATLANTA The U.S. economy
is improving and theres no danger of an economic
backslide in the coming years, but cash flow and buying
confidence have not yet returned to pre-recession levels,
economist Clare Zempel told members of the American Wire
"The economic outlook: the
direction is up," Zempel said at a breakfast reception at the
Interwire convention in Atlanta. "Any slowdowns that do occur,
for whatever reason, are going to be temporary. The bet should
be on growth."
Anecdotally, however, company
owners were not as bullish as indicators might suggest.
"Business is better, but its not where it should be,"
said Zempel, principal of Zempel Strategic, Fox Point, Wis.
Steel wire industry sources at
the convention agreed.
"End users are feeling good
about what theyre seeing out there," said a sales manager
at a wire drawing company in the Midwest that sells into a
range of markets. "It hasnt taken off yet, though."
Various economic indicators show
positive signs, Zempel said, including falling unemployment
claims, steady oil prices, improving housing markets and
relatively steady commodity prices, but the difficulty in
obtaining loans is holding back markets like the steel wire rod
"The government restrictions on
bank loans are preventing banks from making credit
available easily," Zempel told AMM on the sidelines of
the event. "Credit is harder to get than would seem to make
The steel wire rod industry is
feeling both the improvements and credit tightness in their
"Theres a lot of money
hung up. The orders are there," the Midwest manager said. "But
people are waiting for money to come before they start
While demand has improved,
buyers of wire products are not yet willing to make big bets on
products and cash flow remains icy, sources said.
"I dont think anyone wants
to take a big position right now because theyre nervous
about price volatility. Margins remain pretty tight so stakes
on buying decisions can be high as well," Jon Cornelius,
executive vice president of Stockton, Calif.-headquartered
Sumiden Wire Products Corp., told AMM.
Cornelius added, however, that
he was seeing improvements in downstream markets and that
business was better in the construction sector. "It feels like
the worst is behind us," he said.