I cant predict it. This is the toughest-to-read market I have ever seen.
That assessment, from one of the executives who responded to this years AMM survey of attitudes toward business in the new year, reflects the state of concern many in the metals sector are feeling as 2016 gets under way.
Very unsure of the coming markets and where we need to put emphasis moving forward, another executive said in the survey.
As a gauge of where the industry stands and is heading, the annual AMM survey of metals executives has been a remarkably accurate tool for assessing yearly business trends (see The Metrics System column in this issue). So when less than 40 percent in steel, aluminum and other sectors expect this year to be better than 2015while around 30 percent expect business to be worse in 2016it suggests another round of tough times ahead.
Furthermore, most respondentsabout 70 percentpredicted that the domestic economy will not fully turn around until 2017 or later.
At this time in 2014, at least half of all respondents to the survey said that 2015 should be better than the previous year, with the expectation that the slow growth seen over the preceding two or three years would accelerate into more heated markets come the end of 2014.
But that was before, among other things, the full thud of falling energy prices and increasing imported steel levels reverberated through the industry.
U.S. metals market will continue to suffer until trade has been equalizedimport duties should equal same country tariffs to enter the U.S. as U.S. goods are charged in the same country, a steel executive in the survey said.
But global issues are a double-edged sword. In fact, 42 percent of respondents named growth in foreign economies as the factor that would most likely affect the price of metals products in 2016, well ahead of the domestic economy and raw materials costs, which essentially tied for second place.
Speaking strictly domestically, more than 57 percent of respondents said the fact that 2016 is a presidential election year should make the business environment less certain, while around 80 percent of respondents said that recent political and global events have made the business environment less certain.
The responses suggest that the dour concern about governmental leadership as the Great Recession and its fallout enters its 10th year (if we count its start as 2007) continues.
If business does get better this year, it will probably be due more to private sector factors than governmental issues. In the survey, the automotive sector is the only standout category seen as key in the minds of most metals executives, more than even the hope being invested in non-residential construction and possible rebounds in the energy markets.
If your company can weather the storm of 2016-17, youll be better off as an organization going forward, another executive said, summing up many hopesand fearssimultaneously.