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Our annual survey shows optimism in the New Year

Dec 21, 2016 | 04:14 PM | John Ambrosia

What a difference a day makes, if that day is Election Day and if the difference affects the metals industry.

What a difference a day makes, if that day is Election Day and if the difference affects the metals industry.

“Still much wait and see in the steel market. Trump leading growth will have most positive effect.”

That assessment, from one of the executives who responded to this year’s AMM survey of attitudes toward business in the new year, reflects the views of optimism that many in the metals sector are feeling as 2017 gets underway.

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 two-thirds of executives in steel, aluminum and other sectors say they expect this year to be better than 2016 – while only about 9 percent expect business to be worse in 2017 – it suggests better times ahead.

Furthermore, most respondents – about 57 percent – said that the domestic economy will fully turn around by the end of 2017 at the latest.

At this time last year, at much more than half of all respondents to the survey said that 2016 would be worse than 2015, with the expectation that the slow growth seen over the previous two or three years would continue to drag down the market.

And with, among other things, the full thud of falling energy prices and increasing imported steel levels reverberating through the industry, 2016 was indeed a hard year.

“US Metals market will continue to suffer until trade has been equalized - import duties should equal same country tariffs to enter the US as US goods are charged in the same country,” said a steel executive in the survey.

The changing nature of global issues is a key part of the outlook. Heading into 2016, 42 percent of respondents named growth in foreign economies as the factor that would most likely affect the price of metals products, well ahead of the domestic economy and raw materials costs, which essentially tied for second place. But this year, only 13 percent see it that way; faith in the U.S. economy grew considerably in the 2017 outlook survey.

“Nafta free trade agreement ‘renegotiation’ is the major concern,” said one metals executive, “and new political vision of US government referring trading with other countries.”

“President elect is correct about unfair Mexican competition,” said another executive. “Mexican companies have an unfair advantage due to lack of regulations. EPA, OSHA, Banking, etc.”

In the end, it may come down to what often drives boom-and-bust cycles – human psychology. Or, as another executive enthusiatically put it in the survey (echoing the views of many): “As long as President Trump’s in office, America and other countries will be successful!!!!!”