The monthly GOES MMI® registered a value of 245 in July, an increase of 1.2 percent from 242 in June.
The GOES (grain-oriented electrical steel) index gained three points based upon a slight increase in import prices.
Based on analysis from Gerdau Market Update, power construction spending represents 25% of total industrial construction spending. However, the trailing 12-month total expenditure has declined by 27.6%, whereas power construction spending has declined by 61.9% from a year ago and 22.1% in the past three months.
A decline in power construction spending does not bode well for GOES prices longer term.
Reed Construction Data penned a recent story diving into the non-residential construction malaise. The article suggests folks looking for insight into this sector of construction spending need to look at capacity utilization rates. May’s industrial capacity utilization rate reached 77.8%, but if 80-85% utilization rates drive new investment, it should come as no surprise that spending has sputtered.
And of course, commercial construction drives the need for power and power construction.
The “relative” stronger performance for GOES may not last.
Prices for US grain-oriented electrical steel (GOES) coil increased by the same percentage as the index, up 1.2 percent.
The GOES MMI® collects and weights 1 global grain-oriented electrical steel price point to provide a unique view into price trends over a 30-day period. For more information on the GOES MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.