June constructsteel newsletter

Dubai’s real estate market continues to achieve record numbers in the number and value of real estate sales transactions, thus enhancing the emirate’s global position as a preferred real estate investment destination. 4,832 sales transactions worth AED 10.98 billion were recorded in April 2021, the highest value in four years, specifically since March 2017. Real estate sector recovery is also expected to prompt major infrastructure schemes considered before the pandemic to move forward as PPPs, requiring international finance and delivery teams.

Representatives from the UK’s Centre for Digital Built Britain (CDBB) will work with the US National Institute of Building Sciences (NIBS) to help the US develop its own national Building Information Modelling (BIM) programme. NIBS will work with CDBB to adapt the UK programme model and materials as a guide to developing a US national roadmap aligned with the international standard for BIM- ISO19650.

The construction industry in Australia is expected to grow by 2.2% in 2021, with the government’s focus on infrastructure investment playing a key role in reviving the country’s economy. In mid-June 2020, the government announced that 15 infrastructure projects worth approximately US$55 billion would be fast-tracked. Federal, state and territory governments have also reached an agreement to cut approval time for infrastructure projects by half.

The UK construction industry is experiencing its fastest rate of growth for over six years. The IHS Markit Construction PMI Total Activity Index reached 61.6 in April, down only fractionally from March’s six-and-a-half year peak of 61.7 (any figure above 50.0 indicates an overall expansion of construction output). It is the commercial work that is driving the industry’s resurgence – the segment achieved an PMI Index score of 62.2, while civil engineering had a PMI Index of 61.5 and is currently growing at its fastest rate since 2014.

The European Academies Science Advisory Council (EASAC) has published a report highlighting the need for an urgent review of construction methods and materials. In Decarbonisation of Buildings: for Climate, Health and Jobs, EASAC urges EU policymakers to take action to ensure the reduction of embodied carbon in both the construction and renovation of buildings.

Global construction equipment sales were stronger in 2020 than had previously been forecast, due to the spending stimulus implemented by China as a reaction to the pandemic and construction work being deemed ‘essential’ in large parts of the world. The overall decline was expected to be approximately 5%, however, the market grew from already buoyant levels of 2019 by a further 30%.

Nigeria’s construction industry is due to grow by 3.9% in 2021 after a 7.7% decline in 2020. The fall was caused by Covid-19 restrictions and a drop in demand for oil and gas, which accounts for 65% of government revenues. Nigeria’s construction market is due to increase 3.2% annually between 2022 and 2025, supported by state investment in the infrastructure and energy sector.

US President Joe Biden has pledged to tackle construction material shortages that contractors say are driving up unrecoverable costs and causing project delays. Looking at specific product categories, between April 2020 and April 2021, producer price indices have risen as follows: lumber and plywood – 85.7%; steel mill products – 67%; copper and brass mill shapes – 49%; aluminium mill shapes – 20.5%; plastic construction products – 14.2%; gypsum products –12.1%.

Chinese builders have slowed purchases of steel-based materials after prices soared to record highs, but the top steel-consuming construction sector is expected to remain well supported until the rainy season slows activity from June. The most-traded contracts for construction-grade steel rebar and wire rod on the Shanghai Futures Exchange have surged close to 40% this year, and over 20% since April 1, amid a stimulus-driven building boom that has helped lift the Chinese economy since late 2020.

Construction and civil engineering company BAM Nuttall has successfully completed the UK’s largest single pour of a new cement-free concrete. The 300 cubic-metre continuous pour, which supports the foundation for a new stepfree access at a railway station in Kent, UK, is the first use of the product, Cemfree, on UK rail network. Production of Cemfree reduces carbon emissions by up to 80% in comparison to traditional cement-based concrete.

Russia’s industry ministry has held preliminary discussions with metals producers about buying their products for the state stockpile. Moscow has been keeping a close eye on rising raw materials costs in the construction sector as part of efforts to keep domestic commodity prices stable even as they rise at the global level. The government raised taxes for metals companies in 2020.

The modular construction startup Katerra is shutting down – the company plans to cut thousands of jobs and may end up walking away from construction jobs it was contracted to build. Company executive cited the Covid-19 pandemic, along with soaring labor and construction costs as reasons for its latest financial difficulties, however the company’s record of delivering on its projects has been patchy, and the company struggled with delays and cost overruns.

Gulf Development International has unveiled plans to build what is billed as one of the largest volumetric modular assembly plants in the world. The project will take shape within Saudi Arabia’s $500bn Neom city. The $1bn factory project is expected to come up on a 1.4m sqm site in Neom. Once the facility is operational, it will be capable of producing up to 12,500 modular units per year.

Global technology giant ABB has announced a formal move into the construction industry. The Zurich-based technology company aims to drive the uptake of automation and robotics in a construction industry – ABB currently has robotic equipment operating on a number of pilot projects, including the production of prefabricated modular homes, a project which it says has increased in efficiency by 15%

Construction management software company Procore Technologies has acquired INDUS.AI, makers of an artificial intelligence-powered analytics platform for the construction industry, for an undisclosed amount. This move adds computer vision capabilities to the Procore platform, which the company says will help contractors realise greater efficiencies, safety, and profitability.

Builders’ merchant group Travis Perkins has agreed the sale of its plumbing & heating distribution business to a private equity firm for £325 million. Alongside the recent demerger of Wickes, the DIY hardware chain, the sale of P&H represents the completion of Travis Perkins’ restructuring that has been planned since December 2018.

HeidelbergCement, the world’s second-largest cement maker, plans to turn its Swedish factory in Slite into the world’s first CO2- neutral cement plant by 2030 via carbon capture technology. Following the planned retrofit, which will cost at least $122 million, the plant will be able to capture up to 1.8 million tonnes of carbon dioxide per year, which corresponds to the site’s total emissions.

Bam Construct is considering a shift into the residential market with a modular offering. The contractor is looking at how it could capitalise on what it expects to be strong, long-term demand in the residential market. At this stage it is considering working with the public sector and housing associations as well as potentially alongside private developers. The firm has traditionally focused on commercial and public sector building projects.

Kenoteq has been awarded almost €1.2 million in funding from Zero Waste Scotland, to scale up production of its eco-friendly K-Briq. The start-up company, spun out form Edinburgh’s Heriot-Watt University, says the award – part of Scotland’s Circular Economy Investment Fund – will allow it to produce more than two million bricks a year. The K-Briq is made from more than 90% recycled demolition and construction waste material, while its manufacturing process produces just 10% of the CO2 emissions of traditionally-fired bricks and requires 10% of the energy.