Fabricated Structural Metal

Industry Snapshot

The fabricated structural metal industry's products were divided into five categories by the U.S. Census Bureau. The largest sector is fabricated structural metal bar joist and concrete reinforcing bars, which accounted for the vast majority of industry shipments. The other categories are structural metal for bridges; fabricated structural iron for ships, boats, and barges; other fabricated structural metal products; and fabricated structural metal, not specified by kind, which accounted for the remainder. The primary market for fabricated structural metals is the building and construction industry.

In the late 2000s, the industry reported 6,754 establishments engaged in fabricating iron and steel or other metal for structural purposes in 2009 with combined industry shipments totaling more than $17.86 billion, down from $22.7 billion in 2008, according to Dun and Bradstreet. The establishments together employed 130,323 skilled workers. Although other categories were classified within this industry, the 6,059 fabricated structural metal companies dominated with 89.7 percent in market share with sales of $15.23 billion, down from $19 billion in 2008, and 111,178 workers. A distant leading category was the manufacturing structural steel building components with 9,266 employees in 311 companies, shipping $1.58 billion in products, down from $2.3 billion in 2008. States with the highest concentration were Texas, California, Ohio, Florida, and New York. Collectively, these states were responsible for nearly $5 billion in industry shipments, capturing 30 percent of market share.

Background and Development

People first used hammers to work metals into desired shapes. Once people learned that fire could alter the structure of the ores, furnaces were built to melt and cast metals into useful forms. The use of ferrous metals did not begin until 7,000 years after copper and bronze were first smelted. Once technology advanced and iron smelting began, iron rapidly replaced copper for tools and weapons. As of 100 B.C. the use of iron as a semi-structural material was recognized.

By the twentieth century, the kiln, hammer, and anvil had been replaced with blast furnaces and multi-ton presses. Structural shapes were continuously cast and forged, to be cut to standard lengths later. Greater understanding of the metallurgical properties of metals occurred over the course of the industry's development, leading to an evolution in manufacturing processes that gave uniformity and structural integrity to the final product. Working conditions, however, changed little, although steel and iron mills were much safer places to work by the 1990s compared to earlier decades, thanks largely to the Occupational Safety and Health Act and the Environmental Protection Agency. However, hazards remained, making mill work a fairly dangerous occupation in comparison to other manufacturing jobs.

Industry shipment levels remained fairly constant between 1982 and 1994. In 1982, the value of shipments was $8.8 billion. By 1995, this value reached a high point of $10.8 billion. The lowest level during this period was in 1983 when shipment values totaled $8.0 billion.

Despite the strong domestic construction market in the 1990s, imports remained a threat. With the devaluation of Asian currencies in the wake of the financial crisis in the late 1990s, steel imports flooded into the United States. Profits remained low because of this oversupply. At the same time that import levels rose, key fabricated structural metal markets in Asia and Russia diminished. The construction industry stalled in Asia, which reduced demand for the offerings of U.S. firms.

Industry shipments grew from $16.11 billion in 1997 to $18.85 billion in 2000. The cost of materials increased from $8.96 billion to $10.13 billion over the same time, and employment in the industry increased from 92,471 workers to 98,960 workers.

After the bleak early years of the 2000s, the fabricated structural metal industry was bolstered by the overall strong U.S. economy and greater attention paid to construction and new development. As a result of increased demand from the construction sector, shipments of fabricated structural iron or steel products for commercial, residential, institutional, and public buildings rose from $17.4 billion in 2002 to $21.6 billion in 2005. The market for fabricated structural metal for bridges was promising, as was the projected demand from industry expansion and new construction.

Current Conditions

In 2008, a perfect storm of economic conditions converged to bring the U.S. economy to a screeching halt. During the last quarter of 2008 and through 2009, U.S. banks failed, the housing market collapsed, and, despite bailout attempts by the federal government, two of the Big Three automakers (Chrysler and General Motors) filed for Chapter 11 bankruptcy. As a result, shipments of fabricated metal products plunged during 2009. For example, shipments fell by 10.7 percent in February 2009, compared to a year earlier which had seen a 22 percent increase, and new orders were down 17.5 percent.

By 2010, the industry was working its way into recovery. For example, in July 2010, the motor vehicle and parts sector jumped 32.6 percent, compared with July 2009, and fabricated metal products gained 11.5 percent; all manufacturing increased 7.7 percent. The industry was far from full recovery, however. Although the fabricated metal products industry added 6,600 jobs in June 2010, after massive layoffs due to the recession, the industry only reported a net increase of 300 jobs since June 2009. By comparison, the primary metals industry added 17,500 between June 2009 and June 2010.

According to the U.S. Census Bureau, the value of manufacturers' shipments for the fabricated metal industry for the first eight months of 2010 was $217.4 million, up five percent over the same period in 2008. Although positive growth, it compares negatively with the overall growth rate of 10.1 percent recorded for the entire manufacturing sector for the same period.

Industry Leaders

Valmont Industries Inc. of Omaha, Nebraska, was a leader in the industry, with 2006 sales of $1.28 billion. The company, which employed 5,600 workers, derived most of its sales from engineered metal structures, which it sold primarily to lighting, utility, and communications companies. Silgan Holdings Inc., of Stamford, Connecticut, was the top metal container manufacturer in the United States. Valmont Industries' revenues were $1.49 billion in 2007 and $1.90 billion in 2008, when 7,300 workers were employed. The company reported net sales of $1.79 billion in 2009, down from $1.91 billion in 2008.

Nucor Corp. of Charlotte, North Carolina, realized significant growth in the late 1990s because of the considerable capital investments it had made during the decade. In 2008, the company reported a profit of $1.83 billion on sales of $26.66 billion. In 2009, the company posted a net loss of $293.6 million on $11.19 billion of revenues. The company had 20,400 in 2009, making it one of the largest steelmakers in the United States.

Workforce

Employment levels steadily decreased in the 1980s, falling from 103,500 total employees in the industry in 1982 to 70,700 in 1993. With the economic expansion of the mid- and late 1990s, however, more people found work in this industry. By 1995, employment reached 73,700, and by 2002, the workforce had grown to 162,832. By 2005, there were 141,407 people employed in the combined plate work and fabricated structural product manufacturing industries, and in 2008, the total number of workers employed within the industry fell slightly to 133,314. Employment numbers fell again in 2009 to 130,323.