Metal forming and value-added metals processing entered 2026 with improving order signals, though margin volatility persists due to a sharp upward trend in steel prices.
This optimism is supported by a continued rise in the Federal Reserve’s Industrial Production Index for fabricated metal products, an indicator that measures real output in the U.S. fabricated metals sector by tracking physical production. While still below peak levels reached during the post-COVID inventory build in early 2022, the trend reflects positive momentum.
Additionally, the Institute for Supply Management’s (“ISM”) New Orders Index, which spans multiple manufacturing industries, reached its highest level in several years. ISM also reported that fabricated metal products was one of 12 industries showing growth in February 2026.
Similarly, capacity utilization for fabricated metals has steadily increased since fall 2025, following a period of stagnation during the first three quarters of the year. This suggests the sector may be starting to break out of a no growth environment.
Overall, we are seeing encouraging signs in a market that is increasingly “barbell-shaped,” with resilient non-cyclical industries on one side and continued weakness in more cyclical end markets, such as vehicles, on the other. We explore these dynamics further on the following pages.
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