Ulbrich Economic Update - Number 58 (March 2025)
Download the 15 page Economic Update for the full details of recent economic trends impacting the steel and commodities markets, as well as the associated industries across the globe. Continue for the Executive Summary.
The Americas
U.S. MANUFACTURING ACTIVITY EXPANDED MARGINALLY for the second consecutive month in February, with the ISM Manufacturing PMI registering 50.3%, down from 50.9% in January. Factory output stabilized but remained cautious amid economic uncertainty, while employment in the sector contracted as firms reduced staff through attrition rather than urgent layoffs. Durable goods orders rebounded in January, rising 3.1% after two months of declines, led by a 9.8% jump in transportation equipment. The Leading Economic Indicators Index fell 0.3% in January, reversing recent gains, as consumer sentiment weakened and manufacturing hours declined. Inflationary pressures persisted, with the Consumer Price Index increasing 0.5% in January, bringing annual inflation to 3.0%, while the Producer Price Index rose 0.4% on the month, with final demand goods up 0.6%.
Retail sales dropped 0.9% in January, marking the steepest decline in nearly two years, driven by adverse weather conditions and weaker auto sales. Consumer spending also fell 0.2%, its first decline in nearly two years, amid rising prices and trade-related uncertainties. Home sales slumped, with new single-family home sales plunging 10.5% in January as high mortgage rates and severe winter weather deterred buyers. Construction spending unexpectedly declined 0.2% in January, weighed down by a 0.7% drop in multifamily housing investment, while single-family construction edged up 0.6%.
Steel Industry Updates
U.S. STEEL INDUSTRY SUPPORTS TRADE LAW REFORMS TO COUNTER CHINA, as the Steel Manufacturers Association and other industry leaders back the Leveling the Playing Field Act 2.0. The legislation aims to strengthen anti-dumping measures and countervailing duties against unfair trade practices. Meanwhile, Cleveland-Cliffs posted a $754 million loss in 2024, citing weak demand and high interest rates, though Q1 shipments are expected to improve.
Overseas
THE EU PROPOSED A €150 BILLION BORROWING PLAN FOR DEFENSE, responding to security concerns amid the war in Ukraine. The package aims to strengthen air defense, missiles, and drone programs, though some EU nations prefer grants over loans. Meanwhile, BYD raised $5.59 billion in Hong Kong’s largest share sale in four years, with the UAE’s Al-Futtaim Family Office taking a strategic stake.
Energy Sector News
U.S. OIL AND GAS PRODUCTION HIT RECORD HIGHS IN DECEMBER, with crude output reaching 13.49 million barrels per day. The Gulf of Mexico saw a strong recovery, while Texas production dipped slightly. Meanwhile, the U.S. has ordered Chevron to wind down its oil exports from Venezuela within 30 days, citing a lack of electoral progress by President Nicolás Maduro.
Metals & Commodities
THE U.S. LAUNCHED A TRADE INVESTIGATION INTO COPPER IMPORTS, citing national security concerns and potential tariffs. The probe follows similar reviews on lumber and digital services taxes. Meanwhile, Canada extended its mineral exploration tax credit to reduce reliance on Chinese investments, attracting new domestic exploration projects.
Medical Insights
ELI LILLY ANNOUNCED A $27 BILLION U.S. EXPANSION, planning to build four new production facilities to meet rising demand for its diabetes and weight loss drugs. Meanwhile, the EU reaffirmed its positive recommendation for Eisai and Biogen’s Alzheimer’s drug Leqembi, clearing the way for potential European approval despite safety concerns.
Automotive Trends
THE U.S. CONSIDERS AUTO IMPORT TARIFFS STARTING APRIL 2, with details still unclear as the administration reviews trade policies. Ford is recalling 240,510 vehicles due to seat belt defects, while Tesla is recalling 376,000 vehicles over potential power steering failures. Rivian also announced a recall of 17,260 EVs due to headlight issues affecting visibility in cold weather.
Aerospace Developments
FAA ADDRESSES AIR TRAFFIC CONTROLLER SHORTAGES AND AGING INFRASTRUCTURE, as lawmakers push for urgent staffing and technology upgrades following near-collision incidents. The agency faces a 3,500-controller deficit, while funding gaps have delayed critical fiber optic upgrades and pilot-messaging system improvements.
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