Ulbrich Economic Update - Number 65 (October 2025)
Download the 13 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 CONTRACTED AGAIN IN SEPTEMBER, with the ISM Manufacturing PMI at 49.1. Consumer confidence fell to 94.2 in September from 97.8, as both the Present Situation Index (125.4) and Expectations Index (73.4) declined. Manufacturing output rose 0.2% in August after a revised 0.1% decline in July, while overall industrial production increased 0.1%. Durable goods orders rebounded 2.9% in August after a 2.6% decline in July, though core capital goods orders excluding aircraft rose 0.6% and shipments slipped 0.3%.
The Conference Board’s Leading Economic Index fell 0.5% in August to 98.4, down 2.8% over the past six months. The Consumer Price Index rose 0.4% in August and 2.9% year-over-year, while the Producer Price Index fell 0.1% in August and rose 2.6% year-over-year. Retail sales increased 0.6% in August, and core sales rose 0.7%, while consumer spending also advanced 0.6%. Pending home sales climbed 4.0% in August. Several key releases, including construction spending, nonfarm payrolls, factory orders, and international trade data, were delayed due to the federal government shutdown, though private-sector reports indicated softer hiring and steady unemployment near 4.3%.
Commodities
SUPPLY CHAINS REORGANIZED UNDER NEW TARIFFS, as the U.S. imposed duties of 10%–25% on timber and furniture imports while shrimp prices surged 21% following higher tariffs on India. Washington weighed zero-tariff access for commodities not produced domestically, including cocoa and palm oil, while Europe ramped rare-earth magnet output to reduce dependence on China.
Overseas
TRADE REALIGNMENT ACCELERATED UNDER TARIFF PRESSURE, as the EU advanced plans for up to 50% steel duties while the U.K. industry warned of a deepening crisis. Chinese textile exports to Europe rose sharply as flows shifted from the U.S., while African producers faced major risks with AGOA set to expire. China’s chip and autonomous-vehicle firms pushed further into Europe despite tightening controls, while India proposed looser aircraft-leasing rules to ease capacity constraints.
Automotive Trends
TARIFF POLICY CONTINUED TO SHAPE INVESTMENT, as the administration weighed tariff-relief credits for U.S.-assembled vehicles while imposing new 25% duties on medium and heavy truck imports beginning in November. Stellantis prepared roughly $10B in U.S. investments and model relaunches while Malaysia sought zero-tariff access for select exports. The U.K. recorded its strongest September vehicle sales since 2020, while India’s manufacturing PMI eased on weaker exports despite solid domestic demand.
Steel Industry Updates
TARIFF ERA DROVE STRATEGIC RESTRUCTURING, as Russel Metals expanded its U.S. presence with the $500M acquisition of seven Kloeckner service centers while Gerdau advanced a R$1.2B expansion in Texas to capture onshoring demand. U.S. Steel approved $300M in modernization projects at Gary Works and Edgar Thomson under Nippon’s “golden share” framework, while the White House invoked that authority to block Granite City idling. Algoma secured C$500M in aid amid mounting losses, Cleveland-Cliffs weighed options for its idled Steelton rail mill, and Hyundai reaffirmed plans for a $5.8B auto-steel joint venture in Louisiana despite labor tensions.
Energy Sector News
POLICY REVERSALS COLLIDED WITH NEW CAPITAL SPENDING, as Algeria outlined a $60B program for oil, gas, hydrogen, and renewables while U.S. groups filed suit over the cancellation of “Solar for All” community funding. Europe accelerated regional supply-chain development for critical materials, while Pakistan’s rapid shift to solar-powered irrigation deepened groundwater stress across Punjab.
Medical Insights
DRUG TARIFFS AND DOMESTIC INCENTIVES SHIFTED HEALTHCARE STRATEGY, as the U.S. implemented 100% duties on branded pharmaceuticals while signaling a 15% cap for EU and Japanese products. The FDA launched a pilot to fast-track U.S.-made generics, while major drugmakers accelerated domestic investment to off set costs. Qualtrics strengthened its healthcare footprint with a $6.75B acquisition of Press Ganey, while the White House expanded AI-based childhood cancer research with $50M in new funding.
Aerospace Developments
DEFENSE ORDERS STRENGTHENED AS AIR MODERNIZATION LAGGED, with Sikorsky securing an $11B CH-53K contract while the State Department cleared a $1.75B HIMARS sale to Canada. GE Aerospace ended a three-week strike through a five-year deal while United gained FAA approval to equip 737-800s with Starlink connectivity. Australia advanced an A$12B AUKUS submarine yard while U.S. regulators expanded eVTOL pilot corridors, even as the FAA’s NextGen program faced rising costs and delays.
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