December constructsteel newsletter

Construction industry will see continued material price escalation over the next couple of years. The forecast for year-over-year price escalation in 2022 remains between 9% to 12%. When looking ahead into 2023, the forecasted escalation yearon-year is 7%, with a return to the long-term average of 2.7% in 2024.

Euroconsruct points to a difficult two years for construction across Europe, with growth forecasts dropping to 0.2% in 2023 and a flat 0% in 2024 compared to 2% previously. Despite a more positive 2022 with 3.0% growth expected, construction output is likely to be weaker than previously thought, with no recovery expected until 2025.

Despite the UK being now officially in recession, major infrastructure projects have survived the axe. The government has promised to make no cuts in capital spending; UK will not grow their capital budget, but it will still increase from £63bn four years ago to £114 billion next year and £115 billion the year after – and remain at that level.

Research carried out for economic consultant Deepki shows that the value of sustainably built property can be as much as 25% higher than unsustainably built property. 58% of surveyed commercial real estate management firms said values increased by between 16% and 25% as a result of the “green premium”, and 29% said the uplift was between 11% and 15%

Netherlands’ highest administrative court ruled that construction projects will in future have to take into account the amount of nitrogen they emit. Until now, projects were exempt from the need to apply for a “nature permit” certifying that they would not lead to nitrogen pollution in a vulnerable nature reserve. The Council of State has now ruled that this is not tenable.

After jumping above its pre pandemic level in September, backlog fell again back below the reading observed in February 2020. ABC’s Construction Backlog Indicator declined to 8.8 months in October, largely due to a decline in the commercial and institutional category. Yet the reading remains 0.7 months higher than in October 2021.

The multifamily market remains the fastest-growing segment in the modular construction industry. The sector took upabout 23% of the commercial modular output last year. That higher adoption in the sector belies the broader trend for modular building, which has just a 5.52% penetration rate across all types of construction.

According to a survey from construction finance software firm Rabbet, late financial payments in the past year cost the industry $208 billion. The figure is a 53% increase from 2021’s total of $136 billion. The report noted, however, that while the increase was large, it was par for the course given the turbulent economic climate surrounding contractors, which is currently fueled by inflation and interest rate hikes.

China’s deepening property crisis is piling pressure on a $1.6 trillion corner of the country’s onshore bond market, as cities and local administrations step in to bail out troubled developers in a state-backed bid to aid the sector. After replacing builders as the biggest buyers of land earlier this year, the nation’s so-called local government financing vehicles, or LGFVs, have now become the main purchasers of half-finished projects of defaulters including China Evergrande Group.

Saudi Arabia’s local cement sales hit 1.45 million tons during the third quarter of 2022, up from 1.43 million tons in the corresponding period a year earlier. A surge in construction activities due to The Red Sea Development Co., AMAALA and other development projects in Saudi Arabia such as NEOM and Qiddiya is expected to drive the recovery of the cement industry after the demand dwindled last year and early this year on account of the pandemic.

Axians France has entered into a partnership with Pix4D, a digital modelling company, to provide its users with digital twins of their infrastructures. Axians says that they will collaborate with Pix4D to build a technological ecosystem intended to improve the accuracy of data capture. Pix4D will leverage its digital twin and AI technology to automatically identify critical telecom assets and their dimensions.

Carbon Re, a climate tech company building state of-the-art AI to decarbonise energy-intensive industries, has raised £4.2 million seed funding to scale up development and deployment of its novel technology. Their Delta Zero AI platform enables the highly pollutive cement industry to reduce over 50 kilotonnes of annual CO2 emissions per plant. Each installation of the software saves as much CO2 as taking 11 000 cars off the road.

NASA awarded 3D printing firm Icon $57.2 million to continue to research and develop technology that could help create structures on the moon’s barren surface. Austin, Texas-based Icon received the funding under Phase III of NASA’s Small Business Innovation Research program, which funds startups and companies working to meet federal research and development needs.

This year, construction management software firm Beti raised $11 million in a strategic growth investment round led by global software and technology equity specialist PSG. The Tel Aviv-based contech firm offers a suite of products on its platform, which includes safety, access control, quality assurance and process control throughout the lifecycle of construction projects.

Spain’s ACS Group’s net profit in the first nine months of 2022 amounted to €480 million, doubling the results obtained in the same period last year. Its construction business obtained a net profit of €255 million — 21.2% more than the previous year. The group says that sales in construction amounted to €22.9 billion, an increase of 21.2% compared to the same period of the previous year.

Engineering and design giant WSP posted a revenue of $2.17 billion, up 9.3% year over year. The Montreal based firm reported a profit attributable to shareholders of $95.4 million for the third quarter, down 9% from the same period last year.

US construction giant Jacobs’s revenue increased to $14.92 billion, up close to 6% from 12 months earlier, due to strong performances from its infrastructure, national security and advanced facilities work. Jacobs reported $644.04 million in profits for its fiscal year 2022, up from $477.03 million a year ago.

Ireland based CRH released its third quarter trading statement with double digit growth in both sales revenue and earnings was reported for the nine month period so far in 2022. The company’s figures mainly attributed this to growth in its Americas Materials and Building Products divisions. It also acquired Barrette Outdoor Living for US$1.9bn, it is a US based retailer and distributor of residential fencing and railing products.

Los Angeles based contractor Tutor Perini’s $1.07 billion in revenue was 9% lower than the $1.18 billion it reported a year ago. The firm posted a loss of $32.5 million in the third quarter, or $0.63 per share, compared to a profit of $0.30 a year ago.

Dallas-based contractor AECOM posted increased profit in the third quarter. The firm reported earnings of $105.6 million, or $0.75 per share, up 9.8% from a year ago, on revenue of $3.43 billion, an uptick of 2.2% from the same period in 2021.

Votorantim Cimentos’ net revenue grew by 18% year-on-year to US$3.60bn in the first nine months of 2022 compared with the previous year. Cement sales volumes rose slightly to 27.8Mt. Domestically revenue grew because price rises counteracted falling sales volumes of cement; outside of Brazil the company reported growing revenue, apart from in its Latin American business.