A Timely Glimpse of American Productivity
This article explores the relevance of Commercial Metals' timely earnings release to the rapidly shifting consensus outlook away from recovery and into mounting economic headwinds. At times like this when prevailing signals are in sudden flux, the significance of these off-cycle earnings reports is heightened as important windows into economic reality.
"Unfortunately, corroborating its own prior guidance, Commercial Metals cites those very sources to account for stronger shipment volumes (especially for rebar) in the third quarter, stating: "Active end markets continue to be heavily weighted toward public works while the private sector remains weak." Although a 13% sequential increase in domestic mill shipments is a welcome development, the underlying story still sounds nothing like the real recovery that key Asian steelmakers like POSCO (NYSE: PKX) have reported."
"I maintain that the state of American industry and any hope for sustainable recovery remain locked in the perpetual embrace of a shared common fate. Commercial Metals has again served to keep Fools' expectations in check by reminding us that "commercial and industrial markets continue to be plagued by high unemployment, illiquidity, high vacancy rates, and suboptimal manufacturing utilization." Until America as a nation begins to produce more and borrow less, I fail to see alternate scenarios from a deep double dip. Please vote in our Motley Poll and then share your thoughts in the comments section below."
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