This morning in metals news, the Bureau of Economic Analysis (BEA) released U.S. real GDP growth figures for Q4 2019, Moody’s says the coronavirus will impact spending in China and Nucor Corporation reported its Q4 2019 and full-year 2019 financial results.
BEA: U.S. GDP rises 2.1% in Q4
U.S. real GDP rose by a rate of 2.1% in Q4 2019, according to an advance estimate released by the BEA on Thursday.
GDP growth in the fourth quarter was flat compared with the previous quarter.
Meanwhile, full-year GDP growth in 2019 settled in at 2.3%, down from an increase of 2.9% in 2018.
Coronavirus impact in China
As health officials in China and around the world sound the alarm about the spread of the coronavirus, some have also weighed in on the potential economic impact of the health crisis.
In its Jan. 30 Credit Outlook, Moody’s noted the coronavirus will impact spending in China.
“In our baseline, we expect the outbreak to have a temporary impact on China’s economy and for annual GDP growth in China to remain in line with our forecast of 5.8% in 2020,” Moody’s said. “However, the composition of growth will likely shift because of a dampening of consumption in the first quarter, potentially offset by stimulus measures. Nonetheless, there is still a high level of uncertainty around the length and intensity of the outbreak, and we will review our forecasts as conditions evolve.
“Following the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, growth and financial markets in China weakened significantly, but for only a short period. An offsetting rebound limited the overall negative effects on annual growth. But the SARS episode is not a perfect comparison, since the composition of the Chinese economy has changed appreciably since 2003, as the exhibit below shows.”
Nucor releases Q4 financial results
Nucor reported consolidated net earnings of $107.8 million in Q4 2019, compared with $275.0 million in Q3 and $646.8 million in Q4 2018.
“Stronger than expected steel mill segment performance in December was the primary driver for higher actual fourth quarter earnings than we indicated in our mid-December quantitative guidance,” Nucor President and CEO Leon Topalian said. “We believe that the inventory destocking that occurred throughout most of 2019 concluded in the fourth quarter, when customers resumed more normal buying patterns. Additionally, general business conditions improved in the fourth quarter due to a number of factors, including a rate cut by the Federal Reserve, the new labor agreement between the United Automobile Workers and GM, and definitive progress on the trade front.”
Nucor reported full-year 2019 net earnings of $1.27 billion, down from $2.36 billion in 2018.