Momentous spring

By Corinna Petry

May 2014 - Manufacturers have been offering fairly optimistic forecasts for the remainder of 2014, at least for North America, now that the costs of a harsh winter—logistics snarls and higher energy usage, for example—are washing away with spring rains. 

Many expect that unmet demand in the first quarter will be satisfied in the second and third. Here’s a little rundown of what’s going on:

•  Ford Motor Co. continues to run overtime shifts—mostly at pickup truck assembly plants—and is demanding that its suppliers do likewise to support their additional production opportunities.

•  The Boeing Co. had a March 31 backlog of commercial aircraft orders valued at $374 billion.

•  Caterpillar Inc. now expects construction machinery sales will jump 10 percent this year, up from its prior estimate of 5 percent. Mining truck sales are down 80 percent from the 2012 peak, however. 

•  Eaton Corp. raised its NAFTA Class 8 truck build rate estimate 5.7 percent to 280,000 units and said commercial aircraft bookings rose 2 percent.  

•  On-highway engine and vehicle components markets in North America have improved for Cummins Inc. 

•  Whirlpool Corp. forecasts 5 to 7 percent appliance sales growth across North America this year.

•  The Railway Supply Institute reports that railcar order backlogs grew a whopping 12.3 percent from Dec. 31, 2013 to April 1, 2014. The American Association of Railroads reports 2014 North American freight traffic through the first 16 weeks of 2014 grew 2 percent from the same period last year.

•  The manufacturing Purchasing Managers Index for March was 53.7 percent, close to the 12-month high of 54.0 percent.

•  The Reuters/University of Michigan Consumer Sentiment Index rose 4.1 points to 84.1 in April based on greater optimism for both the economy and their own finances.

•  As of Feb. 28, total private construction spending grew 13.4 percent compared with the same two months a year earlier, more than offsetting a 2 percent decline in public projects.

As a journalist, I’m an observer. I think 2014 manufacturing activity will foster greater demand for metals products. You see it in the mile-long unit train gliding by filled with Deere tractors, the many trains carrying crude oil, heavy highway truck traffic, filled buses and commuter trains. Everybody is working hard, ostensibly, toward a brighter future.

In the metals space, U.S. rebar manufacturers welcomed a decision placing tariffs on Mexican imports. The mood among stainless producers has improved with an uptick—finally—in commodity nickel pricing. Aluminum and specialty metal producers and distributors suggest the overhang of inventory in the aerospace supply chain is being worked down.  

U.S. steel distributors told the Metals Service Center Institute that they shipped 7.2 percent more tons per day in March versus a year earlier; in Canada daily steel shipments rose a more modest 0.7 percent. U.S. and Canadian aluminum shipments, as measured in tons per day, rose 14.3 and 16.7 percent, respectively.

As I said, people are working hard on all fronts, creating positive momentum. MM

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