April constructsteel newsletter

Global: Global construction equipment sales fell 7% last year from the record high established in 2021, according to the latest information from Off-Highway Research. The downturn was entirely due to the collapse of demand in China – sales in the world excluding China grew 7% in 2022. The forecast for 2023 is a 7% decline in global sales. This is a slightly steeper downturn than envisaged a year previously, due to the weakness of the Chinese market. Stripping China out of the equation, the remaining countries of the world will only see a 5% downturn overall.

European MEPs back plans for a climate neutral building sector by 2050. The proposed revision of the Energy Performance of Buildings Directive aims to substantially reduce greenhouse gas (GHG) emissions and energy consumption in the EU building sector by 2030, and make it climate neutral by 2050. All new buildings should be zero-emission from 2028, with the deadline for new buildings occupied, operated or owned by public authorities in 2026. All new buildings should be equipped with solar technologies by 2028, where technically suitable and economically feasible, while residential buildings undergoing major renovation have until 2032. Link
Europe: Denmark and Germany have signed an agreement to construct a land based hydrogen pipeline transporting hydrogen from Denmark to Germany by 2028. Germany currently has a large and growing hydrogen demand and Denmark, with its current and future wind power resources has potential to be a major exporter.

Norway opened competitions to develop offshore wind farms in two areas of its continental shelf, the first step in its plan to generate 30GW a year this way by 2040. Interested companies have until 4 August to apply to develop the Sørlige Nordsjø II area, and until 1 September to develop the Utsira Nord area.

The US Department of Transportation has established a strategic partnership with the city of Austin, Texas, to develop mobility programs worth some $22bn. Schemes that stand to benefit from the initiative include: Project Connect, a partnership to expand the public transportation network ($7.1bn); The Corridor Construction Program to upgrade a number of traffic arteries ($3.6bn); The Austin Bergstrom International Airport Expansion and Development Programme ($4bn); Improvement works on Interstate-35 ($963m); Roadway extensions, connections, and capacity improvements programs to enhance safety ($250m).

Mexico’s construction sector output fell 4.8% month-on-month in January despite posting positive figures during the last months of 2022. Growth in December was 1.8% and in November it was 2.5%. The figures are seasonally adjusted and in real terms. The sector saw large swings throughout last year, but the November figure was the strongest in over two years. The year-on-year expansion in January was 3.9%.

According to the government of Myanmar, talks are under way on restarting a 1,215km railway across the country, between China’s Yunnan province and the Bay of Bengal. The project, one of the most important in the Belt and Road Initiative, will establish the China–Myanmar Economic Corridor, which will include a pipeline, highways, border trade zones, and a deepwater port and special economic zone. No current cost is known for the rail element of the corridor, but it was priced at $20bn in 2011.

Malaysia, Singapore in talks again over $28bn high-speed railway. The 350km rail project was to have been completed in 2026. It was expected to shorten travel time between Kuala Lumpur and Singapore from 6.5 hours to 90 minutes. The initial cost estimate of $17.4bn later rose to $27.6bn. The project was definitively cancelled in January 2021, after which Malaysia paid $70m in compensation to Singapore.

India has approved plans to build the country’s biggest hydropower project in the state of Arunachal Pradesh. The $3.9bn scheme will be built on the Dibang river, a tributary of the Brahmaputra, in the country’s mountainous northeast.When complete in 2028 it will generate up to 2.9GW of electricity from 12 turbines. The barrier will be a 278m-high, 375m-long concrete gravity dam, which will be the highest of its kind in India. This will  create a 43km-long reservoir with a gross storage capacity of 3.85 billion cubic metres.

Vietnamese infrastructure developer Deoca Group is to team up with fuel distributor Petroleum Trading Lao (Petro Trade) to investigate the possibility of building a $6.3bn railway between Vientiane, the capital of Laos, and the central Vietnamese port of Vung Ang. The partners would invest $1.2bn in building a 103-km segment of the railway. This would be procured as a public–private partnership.

$7.7bn FDI floods Egypt as development of 20 new cities fuel real estate boom. Despite headwinds and economic turmoil associated with the currency devaluation in Egypt, the value of projects awarded in 2022 represented approximately 21% of the total value recorded in the MENA region, indicating a year-on-year spike since 2020. This was attributed to a record inflow of foreign direct investments which increased by 71% for the fiscal year 2021/2022, as well as regional developers investing in critical infrastructure projects, highlighting a resilient real estate sector.

3D printing promises to transform architecture forever. Advances in what’s called “large-scale additive manufacturing”, like desktop 3D printing, involves building objects one layer at a time. Because additive manufacturing builds layer by layer, using only the material and energy required to make a particular component, it’s a far more efficient building process than “subtractive methods,” which involve cutting away excess material – think milling a wood beam out of a tree. Even common materials like concrete and plastics benefit from being 3D-printed, since there’s no need for additional formwork or molds.

Prefabricated building company Mighty Buildings will open a 3D printed building factory in Monterrey, northern Mexico, to cater to the US market. It will make all components needed for an entire home. The company says it can build homes in as few as two months, compared to the industry average of seven to eight months.

A team of engineers has developed a fire-resistant cladding using recycled glass particles. Researchers at RMIT University in Australia claim their solution is cheap, structurally robust, and fire-resistant. The composite cladding material was developed in association with a materials technology company named Livefield to enable a “circular-economy solution to address a major waste stream.”

Swedish multinational construction company Skanska had a strong performance for 2022, despite general economic and geopolitical turmoil. Within its construction operations, the company reported an operating margin of 3.7%, as well as ROCE (return on capital employed) on project development of 8.1%. Overall, the Skanska’s total revenue for 2022 was €14.3 billion, compared with €13.1 billion in 2021.

Italian construction group Webuild has reported a 22% increase in turnover to €8.2bn in 2022 and made a net profit of €118m compared with the net loss of €56m it made in 2021. The company said that its latest figures are the result of a decade of growth that has seen it triple revenues and create over 70,000 direct and indirect jobs.

Fluor Corporation has sold its construction and mining equipment business Ameco South America to Stracon Group. Financial details of the deal have not been released. Peru-headquartered Stracon, which supplies mining and construction services across North and South America, says the acquisition will enable it to expand its geographic reach and service offerings in the mining sector. Ameco South America manages a fleet of approximately 1,000 specialty assets that are used by the mining sector and comes with an “unassailable platform” of relationships from which Stracon can expand its presence in Chile.

Gilbane Building reported $6.5 billion in revenue for its building division. The number represented an 8% increase from its $6 billion in revenue from the year before. Gilbane also spotlighted its performance with public-private partnerships as portfolio grew to more than 40 P3 projects totaling more than $4 billion.

China’s Vanke, the nation’s second-largest developer by sales, arrested an earnings slump by posting $4.36 billion in annual profit, underscoring the divide between private firms and those with state support amid a liquidity crisis. The company’s profit growth was largely flat for 2022, after dropping 46% a year earlier. Vanke’s stabilisation underscores the importance of state-backing as China undergoes a record slump in the property market.