NEW YORK A
government shutdown that lasts more than a few of days will
negatively impact U.S. steelmakers, harming a fragile economy
and influencing demand, steel market sources said Oct. 1,
although the effects may not be felt immediately.
"The lack of
government funding will start to impact things that we care
about," American Iron and Steel Institute president and chief
executive officer Thomas J. Gibson told AMM. "It will
start having effects on consumer spending and consumer
sentiment, and thats probably the most immediate effect
in the economy. Purchases of steel-containing goods will start
slowing down. It could affect federal funding for highways in
the longer term, though ... projects in the ground now will
The shutdown will
discourage market activity if purchasers feel business
conditions are uncertain, Gibson said. Every week of a
government shutdown would diminish quarterly gross domestic
product (GDP) growth by 0.15 percent, Gibson said, while
Lexington, Mass.-based financial forecaster IHS Global Insight
Inc. said in a statement that each week of a shutdown would
result in a loss of $1.6 billion in GDP, and reduce the
fourth-quarter GDP growth rate by 0.16 percent.
on major bills such as Customs reauthorization will also likely
be put on hold.
"Congress will slow
down. (The shutdown) will be the only thing leadership is
focused on. Anything else competing for time will see fewer
developments," Gibson said.
immediately affected by the funding hiatus include U.S. Customs
and Border Protection, which said Sept. 27 it would furlough
nearly 7,000 employees in the event of a government shutdown;
the Department of Commerce, which has delayed all its
administrative deadlines relating to anti-dumping and
countervailing duty laws; and the U.S. International Trade
Commission, which is shutting down its investigative
"In order to please
the far right, they (House Republicans) are taking money out of
the pockets of working Americans, and costing our nation jobs.
Any manufactured crisis that further slows growth and costs
jobs is unacceptable," United Auto Workers union president Bob
King said in a statement.
said they anticipated the shutdown would have little effect on
business short term, but a long-term funding hiatus could hurt
their bottom line.
"Will this cause any significant issues? I think the simple
answer is that in the short runother than minimal delays
at the port due to staffing, or with the DOC they will just
tack on the number of days that they are closed to any pending
investigation schedulesI dont think so," a steel
trader said. "But, in my opinion, if this in the unlikely case
turns into a protracted shutdown then yes, the importing
community will have problems and additional expenses, mostly
with delay issues."