Ulbrich Economic Update - Number 60 (May 2025)
Download the 17 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 REMAINED IN CONTRACTION in April, with the ISM Manufacturing PMI dipping to 48.7 as new orders, production, and employment all declined. Consumer confidence fell sharply for the fifth consecutive month, with expectations hitting a 13-year low and inflation concerns, tariffs, and stock market volatility weighing heavily on sentiment. Manufacturing output edged up 0.3% in March, but durable goods orders surged 9.2% on aircraft bookings, masking broad business caution amid tariff-driven uncertainty. The Leading Economic Index fell 0.7%, its steepest monthly decline since late 2022, while core capital goods orders rose just 0.1%, pointing to softening investment. Inflation appeared to cool modestly in March, with the Consumer Price Index up 2.4% year-over-year and the Producer Price Index rising 2.7%, though tariff-related price pressures remain a looming risk. Retail sales climbed 1.4% in March on pre-tariff buying, but analysts warn of a pullback as consumer sentiment deteriorates. Construction spending unexpectedly declined 0.5%, and housing markets showed mixed signals amid high mortgage rates and cost concerns. Nonfarm payrolls are projected to have increased by 130,000 in April – down from 228,000 in March – while the unemployment rate is expected to remain unchanged at 4.2%.
Overseas
THE GLOBAL TRADE LANDSCAPE CONTINUES TO SHIFT amid escalating tariff tensions and resource negotiations. Japan and Taiwan have both initiated working-level tariff talks with the U.S., while RWE has paused U.S. offshore wind plans citing political uncertainty. EU aerospace and auto firms are adjusting strategies as tariffs reshape demand and supply chains. China’s airlines and cleantech sectors are bearing tariff burdens. In a major development, the U.S. and China agreed to a 90-day tariff truce, rolling back most recent increases and reopening trade talks. India continues to rely on services exports to offset goods trade. India continues to rely on services exports to offset goods trade deficits.
Steel Industry Updates
U.S. STEEL INVESTMENT MOMENTUM has continued into Q2, with Nucor expanding rebar, coating, and tower manufacturing capacity across several states and SSAB announcing a $74M project in Alabama to support high-strength steel output. Cleveland-Cliffs will close its historic Steelton mill by June 30, citing weak demand in the railroad sector. Meanwhile, the Commerce Department has launched a formal process to expand Section 232 tariffs to include derivative products.
Metals & Commodities
THE PENTAGON’S AI METALS TOOL has been privatized under the new Critical Minerals Forum, aiming to secure non-Chinese supply chains. Congo, Rwanda, and Ukraine remain focal points for U.S. mineral diplomacy, with peace accords and Western-backed investments in play. China’s clean tech exports to developing nations have surged, but Indonesian royalty hikes and global tariff shifts may disrupt broader commodity flows.
Energy Sector News
MAJOR OIL COMPANIES FACE PRESSURE as Brent crude dips below $60, and profits across ExxonMobil, Chevron, and others fall $90B from 2022 levels. The Interior Department is rolling back Biden-era bonding rules to free up capital for offshore drilling. OPEC+ output increases and U.S. tariffs have weakened market confidence, while China has capitalized on low prices to boost imports to 11M barrels/day. Indonesia’s royalty hikes may dampen output and investment across the nickel supply chain.
Automotive Trends
U.S. AUTO JOBS HAVE DROPPED 12.7% year-over-year, led by a sharp 17.8% drop in parts manufacturing. Michigan remains the top auto employment hub, followed by Indiana and Ohio, while GM has slashed its annual profit outlook due to an expected $5B tariff hit. Nissan has forecast a record annual net loss of up to ¥750B ($5.26B), citing global impairments and restructuring. India’s vehicle import tariffs remain high, but signs point to a potential cut, stirring debate among domestic automakers.
Aerospace Developments
BOEING FACES EXPORT HURDLES as China declines delivery of U.S.-made jets due to tariffs, and Chinese airlines continue to report heavy losses from reduced demand and trade war fallout. The FAA has reinstated Thailand’s Category 1 air safety rating, enabling Thai carriers to resume U.S. service. Starlink has resumed operations in the DRC following a lifted ban, expanding satellite coverage in Africa. FAA modernization plans are advancing, with IBM and Raytheon named potential contractors for a $12.5B overhaul.
Medical Insights
THE U.S. FDA HAS ACCEPTED Novo Nordisk’s oral Wegovy application, with a decision expected in Q4, while Neuralink has earned “breakthrough” status for its speech-restoring brain implant. HistoSonics is exploring a $2.5B sale amid robust interest from Medtronic and J&J. Meanwhile, the U.S. government is investing $500M in a “universal vaccine” project targeting multiple virus strains, with flu trials expected in 2026.
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