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'A lot more pain before any gain'.

Article Excerpt
Eli Lustgarten, senior vice president and senior analyst with Longbow Research, Independence, Ohio, offered this assessment of America's troubled economy during the Metals Service Center Institute's Tubular Product Division Conference January 16 in Indian Wells, Calif.

THE U.S. ECONOMY and the steel market are facing some serious challenges, but the disastrous fourth-quarter results don't necessarily foretell a similarly disastrous 2009, Lustgarten told the gathering of service center and mill executives last month. "Don't use December and January data to extrapolate the year," he emphasized. "This was a compressed reaction to get the economy sized for the change of environment."

Putting the recent downturn in perspective, Lustgarten noted that the U.S. industrial sector has outperformed the S&P 500 since the year 2000. The recent downturn takes the sector back to the level of three years ago, but it remains substantially stronger than eight years ago. "We've given back the improvement of the last three years, but not the improvement that started at the beginning of the decade," he said.

Indeed, the last four years was a period of above normal performance for...

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