Cautious is the word that
best describes steel executives current thinking. The
future looks like it will be brighter--after all, business is
better than it was just four or five years ago--but there
remains a nagging concern that something isnt quite
AMM conducted a survey on behalf of
PricewaterhouseCoopers LLP among global steel executives,
similar to surveys conducted in 2011 and 2012. And while 68
percent of respondents said they felt somewhat or
very optimistic about where business is heading, 32
percent said they were somewhat or very
pessimistic, up from just 6 percent two years ago.
What has happened in
that time to change those perceptions? After all, for many
companies profits have been growing since the Great Recession.
The answer seems to be a continuing uncertainty about the U.S.
economy, the global financial outlook and the nature of
domestic politics. So although many in the metals sector remain
upbeat in general, on specific points there is still concern:
When will the construction sector pick up? What is the overall
future of shale gas development? Where are taxes and
We take a look at the
meaning of the survey numbers starting on page 14, but here are
a few quick conclusions:
are getting glummer. In April 2011, 94 percent of executives
surveyed were very or somewhat
optimistic about the next 12 months; last year, that number
fell to 71 percent. This year it is still a strong number at 68
percent, but it reflects signs of concerns.
hiring, retaining and managing employees remain the biggest
strategic initiatives or challenges that executives face.
occasional news about smaller deals and the possibility of a
return to the occasional megadeal, only 14 percent of survey
respondents are aggressive in their approach to mergers and
acquisitions, essentially unchanged over the past two
>> A majority of
executives do not see emerging markets--such as Brazil, Russia,
India and China--as a path to expansion in the next year. Last
year, more than half believed such expansion was likely.
gas regulation continues to have little impact on business,
perhaps because national legislative efforts have slowed
technology strategies are still an important aspect of the
metals business. In fact, 86 percent of survey respondents said
it is very critical or somewhat important to their operations,
up slightly from last year.
As steel executives
prepare to make decisions that will shape the next quarter, the
next year and even the next decade, perhaps the directions they
take will help sharpen those viewpoints.