Economy
December 9, 2019
SMU Recession Monitor: Economy's in Good Shape
Written by Peter Wright
With little likelihood of a recession any time soon, the U.S. economy appears to be in better shape than many people believe. This Steel Market Update analysis attempts to provide guidance on the likelihood of a recession in the next six months.
Steel demand is related to GDP, but is vastly more volatile both on the downside during recessions and on the upside at times of economic growth. Figure 1 compares the change in GDP and in apparent steel consumption over a period of 26 years. Steel consumption routinely varies by plus or minus 10 percent or more, and this will happen again. This means that corporate managers whose business is related to steel must be ready with preemptive financial measures when the thunder clouds form.
