Ulbrich Economic Update - Number 54 (November 2024)
Download the 17 page Economic Update for the full details of recent economic trends impacting all industries across the globe, as well as the fall PMA Triannual Report which provides a snapshot of the latest association activities and member benefits. Continue for the Executive Summary.
Steel Industry Updates
ULBRICH STAINLESS STEELS & SPECIAL METALS ACQUIRED ATI PRECISION ROLLED STRIP OPERATIONS in New Bedford, MA, and Remscheid, Germany, expanding its precision-rolling capabilities and global market presence. The New Bedford facility, now Ulbrich Precision Alloys, and the Remscheid facility, now Ulbrich Europe Metals, enhance Ulbrich’s offerings in light-gauge, wide-width nickel alloys, titanium and specialty stainless steel. This strategic move aligns with Ulbrich’s growth strategy, providing new capabilities and market opportunities.
The national security review of the Nippon Steel deal for U.S. Steel is reported to be progressing positively for the companies. The Commerce Department part of the review is no longer an issue for the CFIUS review committee.
The Americas
THE U.S. ECONOMY GREW AT A 2.8% ANNUALIZED RATE IN THE 3RD QTR, as consumer spending increased at its fastest pace in 18 months and inflation slowed sharply, defying forecasts of doom and outperforming global peers. U.S. job growth almost stalled in October as strikes in the aerospace industry depressed manufacturing employment and hurricanes impeded responses for the payroll survey. U.S. manufacturing activity slumped to a 15-month low and factories faced higher prices for inputs. The services sector accelerated to a two-year high as employment rebounded strongly, suggesting the stall in job growth in September was an aberration. Consumer confidence increased to a nine-month high amid improved perceptions of the labor market.
September data included: Industrial production dropped 0.3%, pulled lower by the strike at Boeing and two hurricanes. Manufacturing output fell 0.4%, with aerospace and miscellaneous transportation equipment tumbling 8.3%. Utilities output expanded 0.7%; mining fell 0.6%. Durable goods orders slipped 0.8%, undermined by a 3.1% drop in orders for transportation equipment. Motor vehicles and parts orders gained 1.1%. Commercial aircraft orders and parts tumbled 22.7%, but Boeing did receive 65 aircraft orders, up from 22 in August. Producer prices were unchanged. Consumer prices rose amid higher food costs, but the annual increase in inflation was the smallest in 3-1/2 years. Retail sales rose rose 0.4%, as lower gasoline prices (down 12¢/gallon) gave consumers more money to spend at restaurants and bars. Consumer spending rose 0.5%, putting it and the economy on a higher growth trajectory heading into the final two months of the year.
Overseas
THE EUROPEAN CENTRAL BANK REDUCED INTEREST RATES TO 3.25%, THE THIRD CUT THIS YEAR, saying inflation in the euro zone was increasingly under control, while the outlook for the bloc's economy was worsening. The IMF warned the gap between European and U.S. GDP will widen further by the end of the decade. China's economy in the 3rd Qtr grew at its weakest pace since the 1st Qtr of 2023 amid a spiraling property sector, weak consumer demand, deflationary risks and slowing export growth.
Automotive Trends
FORD MOTOR TEMPERED ITS FULL-YEAR PROFIT FORECAST, blaming supplier disruptions and warranty costs amid a global price war fueled by overcapacity. In contrast, GM boosted its profit expectations. Toyota, GM and Ford all reported weaker sales growth for the 3rd Qtr and flagged a consumer shift to affordable compact vehicles. BYD, China’s biggest EV manufacturer, reported higher quarterly revenues than Tesla for the first time, but a bruising price war in its home market dragged on profitability.
Aerospace Developments
BOEING'S WEST COAST FACTORY WORKERS ACCEPTED A NEW CONTRACT OFFER, ending a bitter seven-week strike that halted most jet production and deepened a budgetary crisis at the troubled plane maker. Union members voted 59% in favor of the new contract, which includes a 38% pay rise over four years. SpaceX stunned the world during its Starship rocket test, catching its booster in midair after it came back from space, and landing the rest of the rocket in the ocean after a plunge thru Earth’s atmosphere.
Energy Sector News
GOOGLE AGREED TO BUY POWER FROM MULTIPLE SMALL NUCLEAR MODULAR REACTORS to meet its electricity demand for AI. The deal with Kairos Power aims to bring Kairos' first small modular reactor online by 2030. EU ministers agreed to support nuclear energy for the first time as part of the bloc’s mandate for the UN climate summit, in a sign of atomic power’s rising prominence as an energy source. European power prices are still falling seasonally from the height of Europe’s energy crisis in 2022.
Medical Insights
THE NUMBER OF MEDICAL DEVICES WITH AI TECHNOLOGY HAS RISEN SHARPLY IN THE PAST DECADE. The FDA has authorized 950 AI or machine learning-enabled devices as of August 2024. In 2015, the FDA authorized six AI medical devices. In 2023, the agency authorized 221 devices. China’s economic slowdown has been affecting many major medical device companies. Philips, Siemens Healthineers, GE HealthCare and BD have all reported declining demand from consumers and hospitals recently.
Metals & Commodities
RIO TINTO WILL BUY ARCADIUM LITHIUM FOR $6.7BN IN CASH, in a deal that highlights how mining companies are positioning themselves for the growth of electric vehicles. Brazil aims to attract mining firms to revive its uranium exploration and production as the world signals renewed appetite for nuclear power. The state-owned INB plans to call for bids.
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