January constructsteel newsletter

Backlog inched up in November to 8.5 months due to an uptick in infrastructure projects, but other sectors continue to struggle. Associated Builders and Contractors’ Construction Backlog Indicator moved up 0.1 month in November, marking the first positive shift following three months of decline. The measure still trails last November’s level of 9.2 months, however, and remains 0.8 months lower than July’s cyclical peak, as high interest rates stymie private development.

High interest rates caused total construction starts to plunge 15% in November to a seasonally adjusted annual rate of USD 927Bn, a 10-month low. The downward spiral pushes overall year-to-date construction starts through November to trail last year’s pace by 4%. November’s double-digit decline now marks the third consecutive month of falling construction starts.

UK construction activity slowed for the third month in a row in November. While all three major sectors of the industry slowed, the fall in housebuilding was most acute. There was a steep reduction in purchasing costs across the construction sector for more than 14 years. This was linked to lower raw material prices, alongside greater competition among suppliers in response to falling demand.

Italy is to withdraw from China’s Belt and Road Initiative (BRI). Prime Minister Giorgia Meloni’s administration is said to have notified Beijing that it would cease participating in the BRI. The country’s BRI membership was due to renew automatically in March next year unless Italy notified China that it was withdrawing. Since coming to office, the Prime Minister sought to lead a more pro-Western foreign policy. The decision comes ahead of an upcoming summit between EU Commission President Ursula von der Leyen and Chinese President Mr. Xi.

Saudi Arabia’s capital expenditure on projects and other investment activity in 2024 is projected to be lower than in 2023 when such spending rose to one of its highest levels. Capital spending is expected to be around SAR 189Bn (USD 50.4Bn) in 2024, nearly 6.9% below the 2023 estimate. There was a 29% surge in estimated actual capital expenditure in 2023 mainly because of increased spending on uncompleted projects that were either stalled or delayed during the Covid pandemic.

The African Development Bank (AFB) will mobilize EUR 246Mn (USD 269Mn) for the Guercif-Nador highway in Morocco. AFB will provide EUR 200Mn (USD 218Mn) and the Africa Growing Together Fund (AGTF) EUR 46Mn (USD 50Mn). The project is part of the drive to modernize the country’s transport infrastructure and related services to boost its logistics competitiveness and attractiveness. In particular, the project will connect the large Nador West Med industrial port complex to Morocco’s motorway network.

Vietnam is willing to commit over USD 70Bn investment to a high-speed railway system that will span the entire country. Expediting this investment is crucial for maximising the potential benefits. As per this plan, the new high-speed national railway network is proposed as a double track with a speed capability of 350km per hour, a gauge of 1,435mm, and an axle load of 22.5 metric tons. The primary focus would be on passenger transportation, but provisions would also be made for freight transport as a contingency measure.

US Construction input prices decreased 0.3% in November compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index. Nonresidential construction input prices decreased 0.3% for the month as well. Inputs to construction are still nearly 39% higher than at the start of the COVID-19 pandemic. Overall construction input prices are 0.8% lower than a year ago, while nonresidential construction input prices are 0.4% lower.

Shipments of cement, including imports, in the US and Puerto Rico fell by 2.5% year-on-year to 80.7Mt in the first nine months of 2023 from 82.8Mt in the same period in 2022. Shipments fell in most states with the exception of Texas and Pennsylvania. In September 2023, 98% of all blended cement shipments were of Portland Limestone Cement. Turkey was the biggest exporter of cement to the country during the reporting period at 6.3Mt followed by Canada, Vietnam, Greece, and Mexico.

Contech startups swim in cash as established firms face pressure. Despite seeing record funding on the contech startup side, 2023 has also marked an inflection point for established incumbents in the space, which are struggling to further grow their customer base, and are seeing a decrease in billings. While a wealth of opportunity awaits smaller contech companies, established firms have struggled to maintain new customer growth rates.

Holcim launched 3D-printed concrete masonry bridge, Phoenix, built with 10 tons of recycled materials, at its Innovation Hub in Europe. Using its proprietary ECOCycle circular technology, Holcim developed a custom concrete ink for Phoenix with recycled materials inside. Phoenix demonstrates how circular construction combined with 3D concrete printing can enable low carbon infrastructure applications. Circular by design, Phoenix stands solely through compression without reinforcement, with blocks that can be easily disassembled and recycled. Holcim and its partners are now exploring how Phoenix could be scaled up to provide more generalised sustainable infrastructure solutions.

The UK Government has unveiled its plans to make the country a global market for carbon capture, usage, and storage (CCUS), adding an estimated GBP 5Bn (USD 6.3Bn) to the economy by 2050. The plan, named the CCUS Vision, sets out how the UK will transition from early projects backed by government support to becoming a competitive market in this area by 2035, meaning UK companies will compete to build carbon capture facilities and sell their services to the world. This is the latest step to develop CCUS technologies, which aim to store 20-30Mt of CO2 per year by 2030 and support 50,000 jobs by 2030, backed by up to GBP 20Bn (USD 25Bn) of investment.

Cement dispatches in Vietnam declined by 15% YoY to 4,965,222t in November 2023, according to the Vietnam National Cement Association, VNCA. Of this total, 1,525,967t was delivered by VICEM, which saw its shipments down by 15%. Other VNCA members supplied 939,255t, down 20% YoY, while non-members saw a 13% drop in deliveries to 2,500,000t. Total exports slipped by 3% YoY to 2,503,749t in November 2023. Clinker exports dropped 22 % YoYt to 1,015,771t, but cement exports increased by 17% YoY to 1,487,978.

The supply chain of Bangladesh’s cement industry has been significantly impacted due to ongoing political agitation, high cost of raw materials, currency appreciation, roadblocks, and lukewarm growth in the construction industry. Cement makers in Bangladesh have reduced production in the face of falling sales due to ongoing political tension, and a slowdown in public and private construction projects. As a result, cement mills in the country have a combined production capacity of nearly 5Mtpm. However, their active production capacity has dropped to around 1.7Mtpm. Meanwhile, in terms of the annual average, production of the key construction material dropped to 2.5Mtpm in 2023 while it was 3.6Mtpm in the previous year.

Australia became the first country in the world to ban the use of engineered stone to protect workers from silica dust. The prohibition on engineered stone, a popular material for bathrooms and kitchens worktops, has been agreed by ministers. The ban follows a campaign by the Construction, Forestry & Maritime Employees Union, and others. Exposure to silica dust from engineered stone has led to a rapid increase in the number of workers developing the serious lung disease silicosis in Australia.

Saint-Gobain announces that it has reached an agreement to acquire a majority stake in IMPTEK Chova del Ecuador, a leading player in the Ecuadorian construction chemicals market supplying waterproofing solutions.

IMPTEK operates a plant in the Quito region and employs around 120 people, with sales of around 30 million euros in 2023. Its range of sealing solutions is sold locally and exported to several Latin American countries. This marks Saint-Gobain’s first industrial presence in Ecuador and is expected to take place in the first half of 2024.

Balfour Beatty anticipates it will slightly exceed its full-year backlog numbers issued in August, with revenue growing about 5% from 2022. The company predicts its order book, or backlog, will be “marginally higher” than the GBP 16.4Bn (USD 20.7Bn) mark it announced at its August half-year earnings call. It also predicts a 5% gain year-over-year in revenue from FY 2022’s GBP 8.9Bn (USD 11.3Bn), driven by higher volume in Phase 1 of the HS2 rail project in the U.K., and increased major airport construction activity in Hong Kong.

InterCement Participações SA has announced that the divestment of its businesses in South Africa and Mozambique, collectively known as the ‘Africa Business’, to Huaxin Cement Co. Ltd (China), has been concluded upon receipt of the provisional price of USD 231.6Mn.

Ireland-based CRH and Barro Group have partnered to jointly acquire Adbri. The companies currently control 47.6% of Adbri combined. Under their offer to shareholders, CRH will raise its stake in the company to 57%.

UltraTech Cement has entered into a share subscription and shareholders agreement to acquire 26% equity shares of renewable energy company Clean Max Terra. The equity investment is up to INR 202.5Mn (USD 2.44Mn). Clean Max Terra, based in Mumbai, India, is a special purpose vehicle to set up 50MW AC/75MW DC solar power project on a captive basis in Saraipali Village, Mahasamund district, Chhattisgarh. The move is a part of UltraTech Cement’s strategy to meet its green power target of 85%, optimize energy costs and ensure compliance with regulatory standards for captive power consumption under electricity legislation.