August 12, 2022
August Market Minute 2022
Where are the Highly Skilled Workers?
New research from the Federal Reserve Bank of Dallas shows the search for highly skilled workers in Texas continues to frustrate many businesses.
Of the nearly 360 respondents, 43.5% said that they are currently trying to fill high-skill positions (roles typically requiring a college degree or higher). Nearly half say that finding these candidates has been very difficult, while another 44% deemed it difficult.
Overall, when asked about the impediments to hiring workers:
74% said lack of available applicants/no applicants
52% said workers were looking for more pay than is offered
41% cited a lack of technical competencies (hard skills)
37% cited a lack of experience in general
The Texas Manufacturing Economy
What’s the outlook for local manufacturing activity? That depends on who you ask, according to the respondents to the Texas Manufacturing Outlook Survey from the Federal Reserve Bank of Dallas.
First, the positive:
Capacity utilization rose 0.2% to 3.5%
Production index rose 1.5% to 2.3%
The future production index climbed 10 points to 13.6.
However, the future general business activity index rose eight points but remained negative at -17.7. This could suggest that more manufacturers expect worsened activity six months from now than improved.
The labor market in Texas, however, could be tightening. According to Houston Economic numbers, the unemployment rate in Houston edged down to 4.6 percent in June. In Texas overall, it dropped to 4.1 percent. As a comparison, the unemployment rate in the U.S. overall was 3.6% in June and 3.5% in July.
Carbon Steel Movements
The price of carbon steel continues to experience some turbulence as we near the fourth quarter. Among the highlights this month:
As of August 10, the price of carbon steel sheet has declined for 16 consecutive weeks. In that timeframe, the price of hot-rolled carbon has dropped 47%, which is approximately $690/ton.
Carbon plate mills have shown some signs of lowering prices, down $120/ton in early August. However, the spread between HRC and PMP remains historically high.
Scrap prices have declined for five months running, down $70/ton in August.
At 78.4%, capacity utilization at carbon mills has fallen to a 14-month low.
Aluminum Shutdowns?
The price of aluminum is near its lowest levels of the year. Pricing began to show signs of stabilizing in July, based in part on a weakening U.S. dollar along with an improved outlook in some indexes.
But the concern over energy prices remains omnipresent. Elevated energy prices across the globe have put additional pressure on aluminum smelters, given the energy intensive way aluminum is produced.
Could we see announcements of smelter shutdowns in the U.S. in the months to come? This is something to watch.
When Technology Met Steel
Sure, you know us here at SteelNow. But do you know our story? Check it out, along with some video intros from our team!