July constructsteel newsletter

Construction market trends

United States

X Values Permits (LHS, SAAR Millions) Output (RHS, SAAR USD Millions)
Jan-19 1.261 516545
Feb-19 1.287 516241
Mar-19 1.305 517830
Apr-19 1.311 523135
May-19 1.347 529067
Jun-19 1.315 541113
Jul-19 1.352 552933
Aug-19 1.489 559944
Sep-19 1.474 563875
Oct-19 1.525 567630
Nov-19 1.527 580119
Dec-19 1.451 586635
Jan-20 1.507 596241
Feb-20 1.442 606421
Mar-20 1.358 615959
Apr-20 1.066 596264
May-20 1.26 584502
Jun-20 1.338 590679
Jul-20 1.546 611092
Aug-20 1.529 641265
Sep-20 1.624 663219
Oct-20 1.613 684421
Nov-20 1.714 702989
Dec-20 1.744 725893
Jan-21 1.883 744621
Feb-21 1.715 737306
Mar-21 1.732 755629
Apr-21 1.738 769180
May-21 1.681 781138
Jun-21 1.657 792046
Jul-21 1.652 807694
Aug-21 1.77 811116
Sep-21 1.625 821300
Oct-21 1.719 830846
Nov-21 1.766 855289
Dec-21 1.913 884297
Jan-22 1.915 912064
Feb-22 1.86 937491
Mar-22 1.879 956267
Apr-22 1.835 970813
May-22 1.712 980391
Jun-22 1.745 955849
Jul-22 1.719 930578
Aug-22 1.542 914591
Sep-22 1.613 896797
Oct-22 1.56 884161
Nov-22 1.402 869624
Dec-22 1.4 859697
Jan-23 1.443 855073
Feb-23 1.62 847449
Mar-23 1.493 847144
Apr-23 1.47 844688
May-23 1.532 861971
Jun-23 1.493 864826
Jul-23 1.501 874187
Aug-23 1.578 876578
Sep-23 1.515 877629
Oct-23 1.534 877566
Nov-23 1.508 879069
Dec-23 1.53 886430
Jan-24 1.508 904235
Feb-24 1.563 914102
Mar-24 1.485 911890
Apr-24 1.44 920253
May-24 1.399 918247

Higher mortgage rates depressing single-family homebuilding and overall US construction spending; Improving housing supply could limit growth in new construction.

Private residential output was down -0.2% m-o-m in May (6.5% y-o-y); Building permits were down -2.8% m-o-m (-8.7% y-o-y).

Private non-residential output was down -0.3% m-o-m in May (4.1% y-o-y). Architecture Billings Index (ABI) dropped to 42.4 in May from 48.3 in April (< 50, contraction).

China

X Values Floor space started
Jan-19 17.91
Feb-19 13.08
Mar-19 10.69
Apr-19 13.08
May-19 11.15
Jun-19 9.12
Jul-19 6.61
Aug-19 6.95
Sep-19 6.05
Oct-19 11.01
Nov-19 8.02
Dec-19 8.26
Jan-20 -6.58
Feb-20 -17.65
Mar-20 -30.64
Apr-20 -18.42
May-20 -8.57
Jun-20 3.82
Jul-20 7.59
Aug-20 7.70
Sep-20 3.91
Oct-20 1.28
Nov-20 1.84
Dec-20 4.71
Jan-21 11.84
Feb-21 24.91
Mar-21 8.31
Apr-21 -4.99
May-21 -10.93
Jun-21 -6.07
Jul-21 -9.99
Aug-21 -13.12
Sep-21 -17.42
Oct-21 -21.25
Nov-21 -22.64
Dec-21 -28.58
Jan-22 -24.11
Feb-22 -23.13
Mar-22 -17.49
Apr-22 -28.93
May-22 -36.03
Jun-22 -43.82
Jul-22 -44.15
Aug-22 -45.33
Sep-22 -45.13
Oct-22 -42.13
Nov-22 -43.85
Dec-22 -43.81
Jan-23 -40.34
Feb-23 -27.45
Mar-23 -19.16
Apr-23 -24.24
May-23 -28.66
Jun-23 -29.59
Jul-23 -29.12
Aug-23 -27.71
Sep-23 -21.52
Oct-23 -19.70
Nov-23 -11.31
Dec-23 -9.94
Jan-24 -11.57
Feb-24 -22.97
Mar-24 -28.35
Apr-24 -23.08
May-24 -21.01

Residential construction remains sluggish despite authorities unveiling steps to stabilise the sector.

The 3 month moving average y-o-y growth in floor space fell -21% in May; floor space sold was down -19.3% y-o-y during the same period.

Europe

X-values PMI (LHS) Output (RHS, %, y-o-y)
Jan-19 50.6 0.5
Feb-19 52.6 6.2
Mar-19 52.2 6.7
Apr-19 52.1 3.1
May-19 50.6 2.6
Jun-19 50.8 1.6
Jul-19 50.6 1.1
Aug-19 49.1 0.9
Sep-19 50.5 0.7
Oct-19 50.7 0.7
Nov-19 50.6 0.8
Dec-19 51.3 -1.1
Jan-20 51.9 4.6
Feb-20 52.5 0.0
Mar-20 33.5 -15.5
Apr-20 15.1 -30.2
May-20 39.5 -11.1
Jun-20 48.3 -4.6
Jul-20 48.9 -3.5
Aug-20 47.8 -0.4
Sep-20 47.5 -2.7
Oct-20 44.9 -2.0
Nov-20 45.6 -0.8
Dec-20 45.5 1.2
Jan-21 44.1 -4.9
Feb-21 45.0 -5.6
Mar-21 50.1 17.7
Apr-21 50.1 42.4
May-21 50.3 12.6
Jun-21 50.3 5.1
Jul-21 49.8 3.6
Aug-21 49.5 -0.1
Sep-21 50 3.6
Oct-21 51.2 4.2
Nov-21 53.3 2.8
Dec-21 52.9 -0.2
Jan-22 56.6 6.2
Feb-22 56.3 9.1
Mar-22 52.8 3.8
Apr-22 50.4 3.1
May-22 49.2 3.4
Jun-22 47 2.6
Jul-22 45.7 1.7
Aug-22 44.2 2.9
Sep-22 45.3 0.9
Oct-22 44.9 1.2
Nov-22 43.6 1.3
Dec-22 42.6 -0.2
Jan-23 46.1 0.8
Feb-23 47.6 1.9
Mar-23 45.0 0.4
Apr-23 45.2 1.2
May-23 44.6 1.2
Jun-23 44.2 1.1
Jul-23 43.5 2.8
Aug-23 43.4 1.4
Sep-23 43.6 1.7
Oct-23 42.7 0.2
Nov-23 43.4 -0.3
Dec-23 43.6 2.5
Jan-24 41.3 -0.2
Feb-24 42.9 -1.7
Mar-24 42.4 -0.9
Apr-24 41.9 -0.9
May-24 42.9
Jun-24 41.8

Residential output in the Eurozone continues to struggle but civil engineering supports the overall sector.

Eurozone construction down -0.2% m-o-m (-0.9% y-o-y) in April; Buildings no change m-o-m (-2.4% y-o-y) in April; Civil engineering down -1.1% m-o-m (3% y-o-y) in April.

The IHS Markit Eurozone Construction PMI dropped to 41.8 in June from 42.9 in May (< 50, contraction).

India

X Values Avg industrial production (y-o-y)
Jan-19 1.4
Feb-19 1.8
Mar-19 5.0
Apr-19 4.3
May-19 2.9
Jun-19 0.2
Jul-19 2.0
Aug-19 -0.7
Sep-19 -5.7
Oct-19 -5.4
Nov-19 0.3
Dec-19 0.9
Jan-20 1.4
Feb-20 5.1
Mar-20 -9.0
Apr-20 -44.4
May-20 -21.1
Jun-20 -12.1
Jul-20 -8.0
Aug-20 -7.5
Sep-20 -0.3
Oct-20 -1.8
Nov-20 -1.7
Dec-20 -0.3
Jan-21 0.7
Feb-21 -3.7
Mar-21 12.6
Apr-21 62.6
May-21 16.4
Jun-21 9.4
Jul-21 9.9
Aug-21 12.2
Sep-21 5.4
Oct-21 8.7
Nov-21 3.2
Dec-21 4.1
Jan-22 4.0
Feb-22 5.9
Mar-22 4.8
Apr-22 9.5
May-22 19.3
Jun-22 13.1
Jul-22 4.8
Aug-22 4.2
Sep-22 8.3
Oct-22 0.7
Nov-22 5.7
Dec-22 8.3
Jan-23 9.7
Feb-23 7.4
Mar-23 4.2
Apr-23 4.6
May-23 5.2
Jun-23 8.4
Jul-23 8.5
Aug-23 13.4
Sep-23 9.4
Oct-23 12.7
Nov-23 7.9
Dec-23 5.0
Jan-24 4.1
Feb-24 7.1
Mar-24 6.0
Apr-24 6.7
May-24 6.3

India’s underlying core industries continue to grow.

The weighted average of eight core industries’ output rose by 6.3% y-o-y in May; production of steel was up 7.6%, and cement was down -0.8% y-o-y.

 

Special topic

InQuik transforms reinforced concrete construction with innovative steel solutions

Logan Mullaney, President at InQuik USA focused on Innovation in Infrastructure, discusses InQuik’s groundbreaking steel solution for reinforced concrete construction. This patented method features prefabricated, modular components that are lightweight, easily installed, and designed for long-term durability, now available in the USA through an exclusive partnership with CMC.

Full article

Technical trends

Decarbonising logistics: Charting the path ahead.

Many companies have set goals to reduce emissions, but not many have a clear plan to achieve them. There are several reasons for this, including uncertainty about new technologies and the high cost of implementing them.

However, there are opportunities to reduce emissions using existing technologies. In the short term, companies can improve efficiency by optimising routes and warehouse locations. In the long term, companies can invest in new technologies such as electric vehicles and biofuels.

Full article

Construction news headlines

construction market and regulations

North America:

US Backlog shrinks after 2 months of gains. Construction backlog inched lower to 8.3 months in May, about a 1.2% drop from the month prior. The tick down in May ends a two-month streak of backlog growth. The overall backlog level remains 0.6 months below May 2023, or about a 6.7% drop. As high interest rates linger, contractors’ optimism about the future remains guarded.

Link

Europe:

UK’s output grew by the fastest rate in two years as commercial work soars. Housing also returns to growth as market conditions improve. Construction activity in the UK accelerated in last month as a rebound in commercial jobs drove the fastest growth in workloads in two years. The S&P Global UK construction Purchasing Managers’ Index (PMI) rose to 54.7 in May, up from 53 in April, the third consecutive month that the figure stood above the no-change mark at 50.

Link

Europe:

Polish construction fell by 6.5% YoY in May (consensus -3.8%), after -2.0% YoY in April. It’s difficult to estimate the impact of two long weekends on the sector, but it was most likely significant. The second quarter of the year will be another period that sees a decline in added value in construction and total investments. Construction production broken down by sector shows real estate developers continuing to report low activity. Building construction decreased by 5.4% year-on-year after -5.9% YoY a month earlier.

Link

Middle East:

Qatar’s Building permit issuance rose by 68% in May. The number of building permits stands at 782, constituting a 68% rise compared to the previous month, which saw 466 permits issued. Their geographical distribution, the municipality of Al Rayyan comes at the top of the municipalities where the number of building permits issued were 249 permits, such as 32% of the total issued permits, while municipality of Al Da’ayen came in second place with 166 permits, such as 21%, followed by municipality of Al Doha with 128 permits, such as 16%, then Al Wakrah municipality with 109 permits, such as 14%.

Link

Africa:

Uganda has signed a pact with a business association from the United Arab Emirates to build a new international airport. The deal for the East African nation’s third such airport expands the UAE’s economic footprint beyond its interests in the renewable energy and oil and gas industries. The UAE’s Sharjah Chamber of Commerce and Industry will build the airport just outside the Kidepo National Park in the northeast near Uganda’s border with Kenya.

Link

Asia:

The Chinese construction industry is expected to expand by 4% in real terms in 2024, supported by investment in infrastructure and energy projects. The Chinese government announced its 2024 Budget in March 2024. The budget includes an expenditure of CNY28.6Tn (USD4Tn) in 2024 – which is an increase of 3.8% compared with the 2023 Budget.
In March, the government announced it plans to invest CNY1.2Tn (USD173Bn) in transport infrastructure projects by the end of this year. Furthermore, in March 2024, the Yangtze River Delta region government announced an investment of CNY140Bn (USD19.6Bn) to develop 32 railway infrastructure projects in the region in 2024.

Link

Asia:

In a significant boost to infrastructure development in Bangladesh, South Korea committed USD815Mn in loans for the construction of the Kalurghat railway cum road bridge in Chattogram. The loan agreement was signed in Dhaka between the Economic Relations Division (ERD) of Bangladesh and the Korean EXIM Bank. According to the agreements, the Economic Development Cooperation Fund (EDCF) will provide a USD724.73Mn loan, while the Economic Development Promotion Facility (EDPF) will contribute USD90.18Mn.

Link

Building materials and construction technologies

North America:

Construction input prices in the US decreased 0.9% in May due to declines in energy prices and broader slowing inflation. The drop marks the first decrease in input prices in 2024. However, both overall and nonresidential construction costs remain 2.1% and 2.2% higher, respectively, than a year ago.

Link

Europe:

UK’s builders merchants’ takings were down 7.2% in the first quarter of the year, compared to Q1 2023. Year-on-year, first quarter sales were down 7.2% by value and 8.7% by volume, with prices edging up 1.6%. Just three of the 12 product categories sold more in Q1 2024 than in Q1 2023, with Workwear & Safety wear (+11.5%) out in front. The two largest categories, Timber & Joinery Products (-10.6%) and Heavy Building Materials (-9.4%), both sold less. Renewables & Water Saving (-26.5%) saw the biggest fall.

Link

Europe:

Cement consumption in Spain reported marginal growth of 0.3% YoY in May to 1.364Mt, up from 1.361Mt in May 2023. Exports were up 11.4% YoY in May, coming in at 504,696t, almost 52,000t more than in the same month of 2023.

Link

Europe:

The price of construction materials in Romania drops by 6% for brick, 3-4% for iron concrete. In contrast to the year 2023, when manufacturers of construction materials engaged in active promotional campaigns, the situation has changed today, becoming more and more difficult for them to maintain prices at a competitive level without compromising product quality. Companies in the construction materials industry are facing a paradigm shift, where low demand leads to a market decline.

Link

Middle East:

Cyprus’ Construction Materials Price Index recorded a decrease of 1.32% in May 2024, when compared to the same period from the previous year. Additionally, for the period of January to May 2024, the index experienced a decline of 1.81% compared to the same period in 2023.
In May 2024, the index stood at 117.35 points, with 2021 acting as the base year, set at 100 points, reflecting a marginal increase of 0.11% compared to the previous month. In terms of main product categories, there were decreases in metal products (-6.68 %), while increases were observed in electromechanical items (3.24%), minerals (1.01%), mineral products (0.49%), and wood, insulation, chemicals, and plastics products (0.30%).

Link

Asia:

Total Vietnam cement sales, including domestic and export, for May amounted to 7.873Mt, down 7.8% MoM from 8.541Mt in April but up 2.6% YoY from 7.678Mt in May 2023. Domestic sales in Vietnam fell 6.7% MoM to 5.317Mt in May from 5.699Mt but were up 5.4% YoY compared to the 5.044Mt reported in May 2023.
Cement exports fell 3% YoY to 1.910Mt, while clinker exports were down 2% YoY to 646,509t. VICEM cement exports were down 53% YoY at 156,135t.

Link

Asia:

Chinese government has set specific carbon emission reduction goals for the cement industry, as the country shifts toward a low-carbon economy. China plans to cut CO2 emissions by around 13Mt between 2024 and 2025. Over the period, China also aims to save the energy equivalent of 5Mt of coal in cement production. It is expected that, by the end of 2030, the overall energy efficiency of China’s cement industry will reach a world-class level and its use of energy will be optimised further. Earlier this year, the country announced that half of the clinker capacity in major air pollution regions should undertake ultra-low emission transformation by the end of 2025. By 2028, 80% of the country’s total clinker capacity is expected to have completed this transformation.

Link

Construction sector players

North America:

Vinci Construction acquired two family-run public works companies in North America, bolstering its road works operations in the northeastern US and Canada
In the USA, Vinci acquired Newport Construction, which specialises in road works and small-scale civil engineering projects, operates in the south of New Hampshire and Massachusetts (primarily in the Boston region).
In Canada, Vinci also acquired Entreprises Marchand & Frères (EMF), another road building company operating in central Quebec and the Baie-James area.

Link

Europe:

BAM has started a redundancy consultation with 40 staff working at its Northern and London arms of its construction business. The firm, which employs 2,200 people across its UK construction division, said the process is expected to last up to 30 days in accordance with employment law. Within the construction sector, the market has been particularly challenging over the past couple of years, as a result BAM has started a consultation process about reducing staff numbers within the Construction segment of Bam UK and Ireland division.

Link

Europe:

France’s Saint-Gobain has entered into an agreement to buy Dubai-based construction chemicals company FOSROC for around EUR960Mn (USD1.03Bn) to drive its international expansion. The transaction, which will be fully financed with cash, is expected to close by the first half of 2025. Saint-Gobain has been looking out for acquisitions outside of Europe as it seeks to grow its worldwide presence in construction chemicals.

Link

Europe:

Europe: Eiffage announced a new partnership that will see it take artificial intelligence (AI) solutions from Google and apply them to the design and implementation of concrete in construction projects. The partnership with Google Cloud will see it develop an internal technology platform based on Google Cloud solutions such as BigQuery, Apigee, Vertex AI and Gemini. The technology would help to boost Eiffage teams’ efficiency and ease of working and that it would focus its efforts on the design and implementation of concrete use cases.

Link

Africa:

Dangote Cement has announced plans to double its investment in Zambia by building a second cement plant. The company has already constructed one plant in Masaita at a cost of USD450Mn, but this investment will now be boosted to USD900Mn with plans for a second facility. The Masaita works is designed to have a cement production capacity of 1.5Mta and is scheduled to reach full capacity by the end of 2024.

Link

Asia:

Dalmia Bharat Ltd agreed to purchase a 26% equity share in Solarcraft Power India (a Karnataka-based solar power firm) for INR103.18Mn (USD1.24Mn). The cement company also signed an agreement to buy compulsory convertible debentures, amounting to 26% additional equity in Solarcraft, for INR84.38m (USD1.01Mn).
Additionally, Dalmia Bharat signed a power purchase agreement with the energy company. The deals are expected to be completed in approximately two months.

Link

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