Economy
New Infrastructure Spending Bill Could Add 3% to Steel Demand
Written by Tim Triplett
August 13, 2021
What does the infrastructure spending plan passed this week by the Senate mean for steel?
On Tuesday, in a bipartisan vote, the Senate passed a $1 trillion infrastructure package that includes $550 billion in new federal spending. That measure now moves on to the House for consideration.
Around 44% of total U.S. steel demand is for construction-related spending. Therefore, if the deal passed by the Senate gets House approval, it has the potential to increase steel demand by around 3% or 3.0 million tons per year for five years, estimates the CRU Economics Team. Demand for that steel would be front-loaded, as steel is often used early in construction projects.
CRU Principal Analyst Josh Spoores noted that the increase could be as high as 4 million tons. “It all depends on the price of steel. Higher price equals less volume, and the vast majority of this is longs products and plate. Sheet demand here is limited,” he said.
There is bipartisan support for investing in the nation’s crumbling infrastructure, though much disagreement over the appropriate scale and source of the funding. The American Society of Civil Engineers estimates the infrastructure funding gap could reach $2.6 trillion by 2029. Continued underinvestment could mean a loss of $10 trillion in GDP and 3 million jobs by 2039, CRU estimates.
Also passed by the Senate this week was the Biden administration’s $3.5 trillion budget blueprint that calls for further spending on healthcare, climate and education, which is expected to face strong Republican opposition.
By Tim Triplett, Tim@SteelMarketUpdate.com
Tim Triplett
Read more from Tim TriplettLatest in Economy
ISM: Manufacturing still contracting, but at slower pace
“U.S. manufacturing activity contracted again in December, but at a slower rate compared to November,” according to Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.
Construction spending steady in November
Construction spending inched higher in November for a second straight month.
Chicago Business Barometer falls for a third month
The December reading of 36.9 declined 3.3 points from the previous month to the lowest reading since May 2024.
ISM: US manufacturing poised for growth in 2025
“Manufacturers are optimistic,” said Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee.
New York state manufacturing activity stable in December
Following a substantial recovery in November, business activity in New York state’s manufacturing sector held steady in December, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.