May constructsteel newsletter

Construction market trends

United States

X Values Permits (LHS, SAAR Millions) Output (RHS, SAAR USD billions)
Jan-19 1.254 517390
Feb-19 1.302 516797
Mar-19 1.291 517696
Apr-19 1.298 522630
May-19 1.338 528461
Jun-19 1.301 540442
Jul-19 1.347 552575
Aug-19 1.528 559755
Sep-19 1.491 563783
Oct-19 1.538 567704
Nov-19 1.522 580112
Dec-19 1.461 586250
Jan-20 1.500 598551
Feb-20 1.440 609465
Mar-20 1.348 617132
Apr-20 1.050 595620
May-20 1.253 583199
Jun-20 1.329 589685
Jul-20 1.526 609849
Aug-20 1.564 641103
Sep-20 1.643 662353
Oct-20 1.622 684180
Nov-20 1.713 702717
Dec-20 1.760 725025
Jan-21 1.866 748052
Feb-21 1.700 742853
Mar-21 1.731 757335
Apr-21 1.714 766640
May-21 1.68 779374
Jun-21 1.644 792075
Jul-21 1.618 806484
Aug-21 1.837 813307
Sep-21 1.636 819594
Oct-21 1.727 828907
Nov-21 1.775 852881
Dec-21 1.948 881281
Jan-22 1.898 912687
Feb-22 1.817 931898
Mar-22 1.877 949368
Apr-22 1.795 965838
May-22 1.708 969636
Jun-22 1.701 955943
Jul-22 1.658 929672
Aug-22 1.586 907606
Sep-22 1.588 891657
Oct-22 1.555 877990
Nov-22 1.402 865170
Dec-22 1.409 853718
Jan-23 1.354 856046
Feb-23 1.482 847507
Mar-23 1.437 846865
Apr-23 1.417 824707
May-23 1.496 853896
Jun-23 1.441 860888
Jul-23 1.443 855438
Aug-23 1.541 866550
Sep-23 1.471 869635
Oct-23 1.498 889911
Nov-23 1.467 886493
Dec-23 1.493 893440
Jan-24 1.489 885153
Feb-24 1.524 890910
Mar-24 1.467 884285

Construction output unexpectedly declined in March with homebuilding likely impacted by a resurgence in mortgage rates. However, underlying activity is underpinned by the housing shortage.

Private residential output was down -0.7% m-o-m in March (4.4% y-o-y); Building permits were down -3.7% m-o-m (2.1% y-o-y).
Private non-residential output was down -0.2% m-o-m in March (11% y-o-y). Architecture Billings Index (ABI) was down to 43.6 in March from 49.5 in February (< 50, contraction).

China

X Values Floor space started
Jan-19 -1.90
Feb-19 -0.86
Mar-19 -1.40
Apr-19 -0.25
May-19 -1.27
Jun-19 -2.33
Jul-19 -2.30
Aug-19 0.58
Sep-19 2.90
Oct-19 3.11
Nov-19 2.01
Dec-19 0.07
Jan-20 -6.38
Feb-20 -15.49
Mar-20 -28.55
Apr-20 -19.28
May-20 -8.53
Jun-20 3.19
Jul-20 6.34
Aug-20 7.45
Sep-20 9.85
Oct-20 11.68
Nov-20 11.25
Dec-20 12.67
Jan-21 20.60
Feb-21 35.73
Mar-21 36.64
Apr-21 22.52
May-21 10.58
Jun-21 10.97
Jul-21 3.39
Aug-21 -3.96
Sep-21 -12.52
Oct-21 -16.65
Nov-21 -16.07
Dec-21 -16.80
Jan-22 -14.05
Feb-22 -13.16
Mar-22 -13.78
Apr-22 -23.32
May-22 -28.53
Jun-22 -28.03
Jul-22 -25.19
Aug-22 -22.29
Sep-22 -22.06
Oct-22 -20.27
Nov-22 -24.07
Dec-22 -29.91
Jan-23 -27.17
Feb-23 -19.69
Mar-23 -03.54
Apr-23 -05.79
May-23 -10.64
Jun-23 -21.93
Jul-23 -24.69
Aug-23 -25.96
Sep-23 -22.18
Oct-23 -21.17
Nov-23 -20.38
Dec-23 -21.75
Jan-24 -22.91
Feb-24 -23.97
Mar-24 -24.30

Housing sector slump continues despite government measures aimed at supporting the sector; railway, road, and civil aviation support overall construction.

The 3 month moving average y-o-y growth in floor space declined by -28.3% in March; floor space sold was down -24.3% y-o-y.

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 1.7
Jul-19 50.6 1.2
Aug-19 49.1 0.9
Sep-19 50.5 0.6
Oct-19 50.7 0.7
Nov-19 50.6 0.8
Dec-19 51.3 -1.2
Jan-20 51.9 4.5
Feb-20 52.5 0.1
Mar-20 33.5 -15.5
Apr-20 15.1 -30.3
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 -1.3
Jan-21 44.1 -4.8
Feb-21 45 -5.5
Mar-21 50.1 17.7
Apr-21 50.1 42.5
May-21 50.3 12.6
Jun-21 50.3 5.1
Jul-21 49.8 3.6
Aug-21 49.5 -0.2
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 6.1
Feb-22 56.3 9.2
Mar-22 52.8 3.8
Apr-22 50.4 3.0
May-22 49.2 3.4
Jun-22 47 2.5
Jul-22 45.7 1.7
Aug-22 44.2 2.9
Sep-22 45.3 1.0
Oct-22 44.9 1.1
Nov-22 43.6 1.3
Dec-22 42.6 -0.2
Jan-23 46.1 0.9
Feb-23 47.6 1.8
Mar-23 45 0.2
Apr-23 45.2 1.1
May-23 44.6 1.2
Jun-23 44.2 1.2
Jul-23 43.5 2.7
Aug-23 43.4 1.6
Sep-23 43.6 1.8
Oct-23 42.7 0.4
Nov-23 43.4 -0.2
Dec-23 43.6 2.7
Jan-24 41.3 -0.5
Feb-24 42.9 -0.5
Mar-24 42.4
Apr-24 41.9
* Index, 2021=100 |Eurozone (2023) = 20 countries

The housing sector remains a major drag on construction. Commercial activity continues to experience declining activity but civil engineering supportive of the overall sector.

Construction up 1.8% m-o-m in February (-0.5% y-o-y); Buildings up 3.5% m-o-m in February (-2.7% y-o-y); Civil engineering up 4.1% m-o-m in February (4.3% y-o-y).

The IHS Markit Eurozone Construction PMI declined to 41.9 in April from 42.4 in March (< 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 10.0
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 5.2

Core sector growth improved to a three-month high led by the steel, electricity, and cement sectors.

The weighted average of eight core industries’ output rose by 5.2% y-o-y in March; production of steel was up 5.5%, cement was up 10.6% y-o-y.

 

Special topic

Innovate with structural steel

Kim Olson, constructsteel’s Vice-Chair, digs into innovation within the steel industry, aiming to follow the success of big tech players and encourage teamwork to boost the sector. Through initiatives like constructsteel’s task groups, we aim to gather shared knowledge and repurpose technologies for big advancements. Olson sees a future where united action drives growth in steel innovation, fostering a cooperative approach to move the industry ahead.

 

 

 

full article

Technical trends

From start-up to scale-up: Accelerating growth in construction technology

To achieve scale, founders, executives, and investors in construction technology need to eliminate the barriers to efficient growth.

Construction sites in 2023 might in many ways resemble those in 1923, with manual bricklaying, paper blueprints, and scaffold towers. At $12 trillion, architecture, engineering, and construction (AEC) is one of the biggest industries in the world, but historically it has been among the slowest to digitise and innovate.

Full article

Construction news headlines

construction market and regulations

North America:

US’ construction starts dip for second straight month with high rates, inflation and restrictive credit suppressed building activity in March. Total construction starts ticked down 1% in March to a seasonally adjusted annual rate of USD1.06 Tn. The drop marks two months of contraction in groundbreakings, largely due to lingering inflation and high interest rates.

Link

North America:

US’ construction backlog inched higher to 8.2 months in March, the first gain this year. Viewed from a broader perspective, however, it amounted to only a nominal improvement. Backlog still remains down 0.5 months compared to March 2023. Overall backlog dropped in March for every size of contractor except for those with under USD30 Mn in annual revenue. Additionally, backlog levels remain lower over the past year for every region except for the middle states, which now has the second largest backlog level of any region in the U.S.

Link

Europe:

In March, Polish construction output collapsed by 13.3% year-on-year, significantly worse than both the consensus of -4.3% and February’s -4.9% print. This reflects dismal activity in both building constructions (-16.1%) and infrastructure-related works (-17.8%). While demand for real estate significantly recovered in the second half of last year in Poland due to a government mortgage support scheme, this has not yet been reflected in construction.

Link

Europe:

Italy experiences a surge in infrastructure investment. Italy’s infrastructure landscape is undergoing a major transformation. The country is experiencing an influx of substantial public and private funding aimed at modernising its transportation network. Projections indicate a 2.6% increase in Italian infrastructure expenditure over the 2021-2026 period and a sustained annual growth rate of 1.7% through to 2031, figures well above the Eurozone average.

Link

Middle East:

Saudi Arabia and China are set to sign agreements for housing projects during a visit by the Saudi Minister of Municipal and Rural Affairs and Housing, Majed bin Abdullah Al-Hogail, to Beijing. The National Housing Company (NHC) of Saudi Arabia and Chinese construction companies are expected to finalise several agreements to build thousands of housing units in the Kingdom. In addition to housing projects, Al-Hogail is expected to extend an invitation to Chinese building material suppliers to invest in a planned logistics zone for construction materials.

Link

Middle East:

Kuwait approved 36 infrastructure projects in its 2024-2025 budget with a combined value of around KWD428 Mn (USD1.4 Bn). The budget also includes 16 projects to support the private sector with a value of KWD72 Mn (USD237.6 Mn). It also comprises 19 projects with a value of KWD140 Mn(USD462 Mn) besides projects under construction.

Link

Asia:

The State Railway of Thailand approved the second phase of the Thailand-China high-speed rail project, extending from Nakhon Ratchasima to Nong Khai. With a total investment of THB341.35 Bn (USD9.2 Bn), the new phase will cover a distance of 357.12 km, incorporating elevated and ground-level sections along the railway route. The route is divided into two segments, consisting of a 202.48-km elevated structure and a 154.64-km ground-level railway. The plan entails the construction of five new stations located at Bua Yai, Ban Phai, Khon Kaen, Udon Thani, and Nong Khai. Construction is projected to take four years for civil engineering work, followed by an additional five and a half years to establish the electric rail system, with the project expected to be operational by 2031.

Link

Building materials and construction technologies

Global:

Reversing a dramatic plunge last year, investment in construction technology grew 20% year-over-year for Q1 2024 to USD672 Mn. Despite the growth in dollars, the number of deals dropped by 4%, down to 66, per the report. This could indicate a potential shift in investment strategies or market dynamics through the rest of the year. North America retained its top status in the investment cycle, as 80% of investment flowed through the region. Europe was second, with 14% of dollars coming through, followed by Asia & Oceania with 2%.

Link

Europe:

The share of imported building materials in Ukraine increased to 23%, and cement consumption by 17%.the share of imported building materials in the Ukrainian market increased from 14% in 2021 to 23% in 2023. The state stimulates demand and is increasing its purchases for defence and reconstruction projects. Ukraine’s cement consumption increased by 17% last year compared to 2022, up to 5.4 million tons. At the same time, Ukraine exported 1.24 million tons of cement last year and imported 23,000 tons of special cement that is not produced in the country. Ukraine’s cement production potential is 13.6 million tons.

Link

Africa:

Egypt’s building material prices have recorded their largest decline in 2024 following government measures to unify currency exchange rates and tackle dollar shortages in the market. Steel prices stood at around EGP38,000 per tonne (USD792) after reaching one of its highest levels of around EGP 43,000 per tonne (USD896) in early 2024. Cement prices also maintain a downward trend and stood at EGP 2,216 (USD46.1) per tonne compared with EGP 2,225.7 (USD46.4).

Link

Oceania:

New Zealand will remove barriers for construction companies to use overseas building products in a move it hopes will bring down prices. Building costs have increased 41% in New Zealand since 2019 in part due to the increase in the cost of materials. House building was also curtailed by a shortage of plasterboard in 2022 when Fletcher Building, which produces more than 90% of plasterboard used domestically, could not keep up with demand. The government said it would recognise building products from trusted overseas jurisdictions, allow authorities who certify new builds to accept the use of products that meet with specific overseas standards, and approve building products certified through reputable foreign schemes.

Link

Construction sector players

North America:

Holcim expects strong demand in North America to continue this year, after beating first-quarter profit forecasts. The company is also planning to separate and spin off its North America business next year. Overall Holcim’s sales fell 2.4% to CHF5.59 Bn (USD6.12 Bn), in line with forecasts, while a strong Swiss franc reduced reported sales by CHD332 Mn (USD366.4 Mn).
On a local currency basis, sales rose 3.4%, while profitability improved, due to higher sales at its products and solutions business, which makes mortars, flooring, and roofing systems.

Link

Europe:

Breedon Group’s sales dropped by 5% year-on-year in the first quarter of 2024. It attributed this to macroeconomic uncertainty and unfavourable weather conditions in the UK. Sales volumes of its materials softened, but prices remained resilient, partly offsetting the decline. The quarter brought three new acquisitions, including the company’s first in the US. Two scheduled cement kiln shutdowns took place within budget and on schedule.

Link

Africa:

Afrimat received approval to acquire all of Lafarge South Africa and its subsidiaries. The acquisition has been structured as a locked box transaction, effective 31 December 2022, and the purchase is valued at USD6 Mn. Afrimat also agreed to repay its loan amounts owed equating to USD47.8 Mn. Afrimat confirmed the acquisition of the LSA Group, part of the Holcim Group. The deal will bring 800 Lafarge employees to Afrimat. The acquisition also includes Lafarge’s fly ash operations and a grinding plant.

Link

Asia:

Daewoo Engineering & Construction Co. (Daewoo E&C) reported lacklustre performance for the first quarter amid the high interest rate and construction cost environment. The company’s operating profit stood at KRW114.8 Bn (USD83.3 Mn) for the January-March period, down 35% from a year earlier. Sales were down by 4.6% and net profit fell by 6.9%. By business segment, Daewoo E&C posted sales of KRW1.59 Tn (USD1.1 Bn) in the housing construction sector, KRW547.8 Bn (USD402 Mn) in civil engineering, KRW272 Bn (USD200 Mn) in plant construction, and KRW69.8 Bn (USD50 Mn) in other affiliated sectors.

Link

Asia:

French glass major Saint-Gobain will invest 6,000 to 8,000 crores (USD70 Mn to USD95 Mn) for expansion of Indian operations in the next two years, as the global glass and building materials manufacturer is targeting revenue at 36,000 crores (USD431 Mn) from India by CY2032.
It comes in the backdrop of India emerging as the third largest profitable market after the US and France for Saint-Gobain, which has operations in 75 countries.

Link

Knowledge partner: