For the millions of American workers idled by the severe stagnation of domestic industrial activity over the past few years, last week's confirmation by Nucor
Fools may recall that I marveled last week at the surprising strength behind Steel Dynamics'
The steelmaker's capacity utilization jumped to 80%, from 68% in the fourth quarter of 2010. That improved utilization -- coupled with an impressive ability to pass along rising costs in the form of a 22% hike in its average sales price per ton -- escorted sales revenue higher by 32% to reach $4.83 billion in the first quarter.
The company anticipates further improvements for the ongoing second quarter; although CEO Dan DiMicco, in his typically colorful way, described some early indicators for the latter portion of the quarter as "mushy." Absent from both the report and the conference call, were any of the more dire warnings about looming stagnation that this Fool has highlighted in the past. Residential and commercial construction continue as the outlying sources of weakness among industrial segments, but Nucor welcomed the "slow, steady improvement in real demand" observed in several end markets.
Offering further context for these encouraging observations, Eastern railroad hauler CSX
While I am encouraged by the data emerging from these bellwether steel and railroad stocks, I am by no means convinced that these welcome improvements will prove sustainable.
The domestic economy remains a beneficiary of a historic campaign of quantitative easing by the Federal Reserve, and so we have yet to ascertain a clear measure of the industrial sector's strength absent such intervention. My own preferred means of gaining exposure to improving industrial activity in the U.S. (and Europe, for that matter) is via the producers of copper, coal, and other basic raw materials of modern industrial activity. With exposure to a leading copper miner like Freeport-McMoRan Copper & Gold
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