US economic indicators show signs of wavering

Several basic materials and construction sector statistics measuring activity for this January are pointing to a slow economic start to the calendar year.

The Illinois-based Metals Service Center Institute (MSCI) says shipments of aluminum products from United States service centers it tracks decreased by 9.8 percent this January compared with shipments in January 2024.

Activity declined less sharply in steel service center shipments, with the MSCI reporting a 1.4 percent reduction in shipments this January compared with one year earlier.

Such shipments were down even more sharply in Canada, with the MSCI indicating steel service shipments fell 15.7 percent year on year while aluminum service center shipments in Canada declined by 14.9 percent.

Michigan-based Wards Intelligence says light vehicle (autos, pickup trucks and sport utility vehicles) production in North America fell by 10 percent year on year this January, pointing to one likely factor in the decline in demand for metal in the U.S. and Canada. Severe winter weather could have been a factor in auto sector demand and production, according to Wards.

Statistics and survey results in the construction sector may point to another issue, with some of those hiccups also potentially weather-related as has occurred in previous winters. 

The Virginia-based Associated General Contractors of America (AGC), citing U.S. government statistics, says the sector in the U.S. added to its overall employment figure this January, though the monthly figure halved from 8,000 jobs added in December 2024 to about 4,000 this January.

According to AGC, while gains were made in the residential and overall nonresidential sectors, by the end of January 2,300 fewer people were employed by “heavy and civil engineering firms,” and another 1,900 jobs were shed in the specialty trades.

A potential dark cloud hanging over the construction sector can be found in January 2025 architectural billing index survey results, with index figures for all four U.S. regions checking in below the “break-even” number of 50.

Survey results gathered for the American Institute of Architects (AIA)/Deltek Architecture Billings Index (ABI) show the U.S. West as having the highest index figure of 48.8, followed by the South at 46, the Midwest at 45.6 and the Northeast at 41.1. “Any score below 50 indicates decreasing business conditions,” sthe survey’s organizers say.

According to the Washington-based AIA and Virginia-based Deltek, “Billings remain weakest at firms with a commercial/industrial specialization,” with a national average index figure of 43.1 in that category. That is followed by a 45.0 figure for the residential sector and a 47.1 index figure for the “institutional” category.

Finally, activity in the heavy equipment sector heavily tied to the construction and metals recycling sectors also shows signs of wavering.

According to the Virginia-based Equipment Leasing & Finance Foundation, its February 2025 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) moved downward in this month’s survey, after three consecutive monthly increases.

“The index reports a qualitative assessment of both the prevailing business conditions and future expectations as reported by key executives from the $1.3 trillion equipment finance sector,” the organization says.

Despite the lower index figure in February, at least one finance company executive contacted by the foundation expresses confidence in economic conditions for the rest of 2025.

“I am optimistic about the opportunities that may happen in 2025,” says David Normandin, president and CEO of California-based Wintrust Specialty Finance. “Business confidence is strong, which will lead to additional investment into capital equipment.”

Business owners and managers likely will keep an eye out as additional February and then March statistics are gathered and released. Those figures could start to indicate how trade and government budgeting policies put in place by the administration of President Donald J. Trump are either benefitting or restraining demand for basic materials and construction services in the U.S.