Indicators point to hiccups in steel demand momentum

Figures for construction employment and passenger vehicle sales this February registered as disappointments, with the steel and metals recycling sectors that supply those industries waiting to see if winter weather is the main culprit rather than a slowing economy.

Statistics gathered by the United States Bureau of Labor Statistics and analyzed by the Washington-based Associated Builders and Contractors (ABC) indicate the construction industry in the U.S. lost 11,000 net jobs this February.

ABC says the construction sector unemployment rate was 6.9 percent in February, outpacing an overall 4.4 percent unemployment rate in the U.S.

“Construction employment shrank again in February and has now declined in eight of the past 11 months,” ABC Chief Economist Anirban Basu says. “Both the residential and nonresidential segments lost jobs for the month, adding to a recent string of downbeat industry data releases.”

The construction activity level in the U.S. has seasonal aspects, with the first two months of 2026 offering some particularly harsh winter weather. Winter storms can halt work at some outdoor worksites and delay the delivery of needed materials.

The nation’s other large steel-consuming industry, the automotive sector, also experienced a subpar February in terms of passenger vehicle sales, according to Atlanta-based Cox Automotive.

That firm says February passenger vehicle sales of 1.2 million units rose by 8.5 percent after a particularly harsh winter sales climate this January.

However, February sales were lower compared with one year earlier, aligning more closely with the slower sales pace in the final quarter of 2025, according to Cox, which says the automotive sales pace has been lower year over year for five consecutive months.

The early 2026 stalled momentum in the two sectors could have been a factor for declines in weekly U.S. steel output in the last week of February and the first week of March.

Steel mill production in the week ending Feb. 28 was down 0.3 percent from the previous week, according to the Washington-based American Iron and Steel Institute (AISI).

That was followed by a 1.1 percent week-on-week decline in output during the week ending March 7. According to AISI, weekly output in the U.S. has fallen from 1.82 million tons in the week ending Feb. 21, to 1.79 million tons in the week ending March 7, a drop of 26,000 tons.

Construction sector analysis by the Virginia-based Associated General Contractors of America (AGC) says activity in the nonresidential and infrastructure sectors remains strong.

“Even with the monthly drop, construction employment has grown at a faster rate during the past year than the broader economy,” says Macrina Wilkins, AGC director of market insights.

In the automotive sector, Cox Automotive says broader uncertainty remains a headwind for shoppers but also refers to March as a traditionally big month for new vehicle sales.

Last year, auto dealers enjoyed strong March sales figures, with some of those sales likely generated when buyers snapped up models imported before tariffs were implemented. Cox Automotive says it is not expecting a repeat performance this year.