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Aug. 7, 2014

Disconnect Between PMI and Reality?
 
Each month, the PMI from the Institute for Supply Management is one of the economy's most-watched bellwethers. When July’s number came out (see related item), it was surely met with excitement from domestic manufacturers.

As spring has fed into summer, the PMI reading has risen with the thermometer. The index, based on a monthly survey of corporate purchasing managers, has been at or above 55 percent for the last four months, topping out at more than 57 percent in July. Past history says such activity levels correspond to annual GDP growth of more than 4.0 percent.

This is wonderful news, except that it’s hard to see comparable evidence of it in the metals sector. MSCI numbers show that while service center shipments of steel and aluminum are above last year’s first-half figures, the gains are relatively moderate. Moreover, the first half of 2013 was uncharacteristically weak compared to the second half.

The story is even less encouraging in the red metals world, where total shipments of copper products lagged 2013 through the first half, reports the Copper and Brass Servicenter Association.

Service center executives surveyed for Metal Center News' annual Mid-Year Report, while positive about prospects for the second half, reported no major spike in order levels thus far this year, certainly nothing commensurate with GDP growth over 4.0 percent.

So, is the metals sector underperforming the rest of the economy or is the PMI a lagging indicator of prosperity still to come? Perhaps both.

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Metal Center News 2014 Directories: Print or Digital copies are available for $85 U.S. for each copy.
 

 
2014 Metal Distribution Directory  
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Metal Center News' Spring Metal Distribution Directory is your on-line guide to Metal Producers, Equipment Manufacturers and Software companies.  



 
2014 Directory of Master Distributors
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The Metal Center News Directory of Master Distributors—distributors who sell to other distributors—is an invaluable tool for service centers seeking new sources for special or hard-to-find products. Master distributors play an important role in the marketplace, giving service centers an alternative to buying in mill quantities and helping to remove redundant and excess inventories from the distribution channel.



 
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Friday, November 28, 2014